Question

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

2007
2008
home valued at $315,000
home valued at $325,000
mortgage of $265,000
mortgage of $240,000
car valued at $10,000
car valued at $6,000
car loan of $5,000
car loan of $1,000
savings of $2,000
credit card debt of $1,500

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 1

To analyze the assets and liabilities of the Chang family from 2007 to 2008, let's calculate the total assets and total liabilities for both years.

### 2007
**Assets:**
- Home: $315,000
- Car: $10,000
- Savings: $2,000
**Total Assets in 2007 = $315,000 + $10,000 + $2,000 = $327,000**

**Liabilities:**
- Mortgage: $265,000
- Car Loan: $5,000
- Credit Card Debt: $1,500
**Total Liabilities in 2007 = $265,000 + $5,000 + $1,500 = $271,500**

### 2008
**Assets:**
- Home: $325,000
- Car: $6,000
- Savings: $2,000
**Total Assets in 2008 = $325,000 + $6,000 + $2,000 = $333,000**

**Liabilities:**
- Mortgage: $240,000
- Car Loan: $1,000
- Credit Card Debt: $1,500
**Total Liabilities in 2008 = $240,000 + $1,000 + $1,500 = $242,500**

### Change from 2007 to 2008
- **Assets increased:** $333,000 (2008) - $327,000 (2007) = $6,000 increase
- **Liabilities decreased:** $242,500 (2008) - $271,500 (2007) = $29,000 decrease

Now comparing the changes:

- **Assets:** Increased
- **Liabilities:** Decreased

Based on this analysis, the correct answer is:
**d. From 2007 to 2008, assets increased and liabilities decreased.**