Wilma Has a $42,500 Certificate of Deposit (CD)at the Local

Multiple Choice

Wilma has a $42,500 certificate of deposit (CD) at the local bank. The interest on this certificate, $2,550, was credited to her account this year, but she must pay an early withdrawal penalty if she cashes in the CD before next year. Which of the following is a true statement?

A) Wilma must include the $2,550 of interest in her income this year.
B) Wilma must include the $2,550 of interest in her income when she cashes the CD.
C) Wilma must include the $2,550 of interest in her income this year only if the bank waives the early withdrawal penalty.
D) Wilma must include the $2,550 of interest in her income next year if she does not pay the early withdrawal penalty.
E) All of the choices are correct.