First, let's calculate the total assets and liabilities for the Smith family in the years 2005 and 2009.
### Assets in 2005:
- Home value: \[tex]$200,000
- Car value: \$[/tex]25,000
Total assets in 2005:
[tex]\[ \text{Total assets 2005} = \$200,000 + \$25,000 = \$225,000 \][/tex]
### Liabilities in 2005:
- Mortgage: \[tex]$30,000
- Car loan: \$[/tex]8,000
Total liabilities in 2005:
[tex]\[ \text{Total liabilities 2005} = \$30,000 + \$8,000 = \$38,000 \][/tex]
### Assets in 2009:
- Home value: \[tex]$180,000
- Car value: \$[/tex]18,000
- Boat value: \[tex]$20,000
Total assets in 2009:
\[ \text{Total assets 2009} = \$[/tex]180,000 + \[tex]$18,000 + \$[/tex]20,000 = \[tex]$218,000 \]
### Liabilities in 2009:
- Home equity loan: \$[/tex]18,000
- Personal loan: \[tex]$5,000
Total liabilities in 2009:
\[ \text{Total liabilities 2009} = \$[/tex]18,000 + \[tex]$5,000 = \$[/tex]23,000 \]
### Comparison:
Let's compare the assets and liabilities between 2005 and 2009.
- Assets:
- 2005: \[tex]$225,000
- 2009: \$[/tex]218,000
- Change: The assets decreased from \[tex]$225,000 to \$[/tex]218,000.
- Liabilities:
- 2005: \[tex]$38,000
- 2009: \$[/tex]23,000
- Change: The liabilities decreased from \[tex]$38,000 to \$[/tex]23,000.
Based on this analysis, it is clear that:
- Assets decreased from 2005 to 2009.
- Liabilities decreased from 2005 to 2009.
Therefore, the correct statement is:
a. From 2005 to 2009, both assets and liabilities decreased.
Thus, the answer is (a).
