The following table shows the assets and liabilities of the Chang family in 2007 and 2008.

\begin{tabular}{|l|l|}
\hline
\textbf{2007} & \textbf{2008} \\
\hline
Home valued at [tex]$\$[/tex] 315,000[tex]$ & Home valued at $[/tex]\[tex]$ 325,000$[/tex] \\
\hline
Mortgage of [tex]$\$[/tex] 265,000[tex]$ & Mortgage of $[/tex]\[tex]$ 240,000$[/tex] \\
\hline
Car valued at [tex]$\$[/tex] 10,000[tex]$ & Car valued at $[/tex]\[tex]$ 6,000$[/tex] \\
\hline
Car loan of [tex]$\$[/tex] 5,000[tex]$ & Car loan of $[/tex]\[tex]$ 1,000$[/tex] \\
\hline
Savings of [tex]$\$[/tex] 2,000[tex]$ & Credit card debt of $[/tex]\[tex]$ 1,500$[/tex] \\
\hline
\end{tabular}

Based on the table, which of the following is true?

A. From 2007 to 2008, both assets and liabilities decreased.
B. From 2007 to 2008, both assets and liabilities increased.
C. From 2007 to 2008, assets decreased and liabilities increased.
D. From 2007 to 2008, assets increased and liabilities decreased.



Answer :

Let's analyze the data provided to determine the correct statement.

First, we will calculate the total assets and liabilities for the years 2007 and 2008.

### Year 2007
#### Assets:
1. Home value: [tex]$315,000 2. Car value: $[/tex]10,000
3. Savings: [tex]$2,000 The total assets for 2007 are: \[ 315,000 + 10,000 + 2,000 = 327,000 \] #### Liabilities: 1. Mortgage: $[/tex]265,000
2. Car loan: [tex]$5,000 The total liabilities for 2007 are: \[ 265,000 + 5,000 = 270,000 \] ### Year 2008 #### Assets: 1. Home value: $[/tex]325,000
2. Car value: [tex]$6,000 3. Credit card debt (considered as a negative asset): $[/tex]-1,500

The total assets for 2008 are:
[tex]\[ 325,000 + 6,000 - 1,500 = 329,500 \][/tex]

#### Liabilities:
1. Mortgage: [tex]$240,000 2. Car loan: $[/tex]1,000

The total liabilities for 2008 are:
[tex]\[ 240,000 + 1,000 = 241,000 \][/tex]

### Changes from 2007 to 2008
#### Change in Assets:
[tex]\[ 329,500 - 327,000 = 2,500 \][/tex]

This indicates that the total assets increased by [tex]$2,500 from 2007 to 2008. #### Change in Liabilities: \[ 241,000 - 270,000 = -29,000 \] This indicates that the total liabilities decreased by $[/tex]29,000 from 2007 to 2008.

### Conclusion
From the calculations:

- Total assets increased by [tex]$2,500. - Total liabilities decreased by $[/tex]29,000.

Thus, the correct statement that describes the change from 2007 to 2008 is:
d. From 2007 to 2008, assets increased and liabilities decreased.