You are a college freshman and have a credit card. You immediately purchase a television set for $1200. Your credit limit is $2000. Let’s assume that you make no payments and purchase nothing more and there are no other fees. The monthly interest rate is 1.12%.What is your initial credit card balance?

Your initial balance is the amount charged to the card when you buy the television: $1,200. The $2,000 credit limit is the maximum you can borrow, and the monthly interest rate affects the balance later, not the initial balance. Therefore, the correct choice is $1,200.

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