To determine the changes in the assets and liabilities of the Chang family from 2007 to 2008, let's calculate the total assets and total liabilities for both years and compare them.
First, let's calculate the total assets and liabilities for 2007:
Assets in 2007:
- Home value: \[tex]$315,000
- Car value: \$[/tex]10,000
- Savings: \[tex]$2,000
Total assets for 2007:
\[ 315,000 + 10,000 + 2,000 = 327,000 \]
Liabilities in 2007:
- Mortgage: \$[/tex]265,000
- Car loan: \[tex]$5,000
Total liabilities for 2007:
\[ 265,000 + 5,000 = 270,000 \]
Next, let's calculate the total assets and liabilities for 2008:
Assets in 2008:
- Home value: \$[/tex]325,000
- Car value: \[tex]$6,000
Total assets for 2008:
\[ 325,000 + 6,000 = 331,000 \]
Liabilities in 2008:
- Mortgage: \$[/tex]240,000
- Car loan: \[tex]$1,000
- Credit card debt: \$[/tex]1,500
Total liabilities for 2008:
[tex]\[ 240,000 + 1,000 + 1,500 = 242,500 \][/tex]
Now, let's compare the totals from both years:
Assets:
- 2007: \[tex]$327,000
- 2008: \$[/tex]331,000
There was an increase in assets from 2007 to 2008, as [tex]\(331,000 > 327,000\)[/tex].
Liabilities:
- 2007: \[tex]$270,000
- 2008: \$[/tex]242,500
There was a decrease in liabilities from 2007 to 2008, as [tex]\(242,500 < 270,000\)[/tex].
Therefore, the correct option is:
d. From 2007 to 2008, assets increased and liabilities decreased.
