Alright, let's determine which statement is true by analyzing the assets and liabilities of the Smith family in 2005 and 2009.
### 2005
1. Assets:
- Home valued at \[tex]$200,000
- Car valued at \$[/tex]25,000
Total Assets in 2005 = \[tex]$200,000 (home) + \$[/tex]25,000 (car) = \[tex]$225,000
2. Liabilities:
- Mortgage of \$[/tex]30,000
- Car loan of \[tex]$8,000
Total Liabilities in 2005 = \$[/tex]30,000 (mortgage) + \[tex]$8,000 (car loan) = \$[/tex]38,000
### 2009
1. Assets:
- Home valued at \[tex]$180,000
- Car valued at \$[/tex]18,000
- Boat valued at \[tex]$20,000
Total Assets in 2009 = \$[/tex]180,000 (home) + \[tex]$18,000 (car) + \$[/tex]20,000 (boat) = \[tex]$218,000
2. Liabilities:
- Home equity loan of \$[/tex]18,000
- Personal loan of \[tex]$5,000
Total Liabilities in 2009 = \$[/tex]18,000 (home equity loan) + \[tex]$5,000 (personal loan) = \$[/tex]23,000
### Comparison
Now we compare assets and liabilities from 2005 to 2009:
Assets:
- 2005: \[tex]$225,000
- 2009: \$[/tex]218,000
Assets decreased from \[tex]$225,000 to \$[/tex]218,000
Liabilities:
- 2005: \[tex]$38,000
- 2009: \$[/tex]23,000
Liabilities decreased from \[tex]$38,000 to \$[/tex]23,000
Based on this analysis, from 2005 to 2009, both assets and liabilities decreased.
### Conclusion
Therefore, the correct statement is:
a. From 2005 to 2009, both assets and liabilities decreased.
