In February $2023,$ Jasmine invested $$1,000$ in a five$-$year certificate of deposit $($CD$)$ with Capitol Two Bank. She withdrew $$250$ in September $2023.$ Select the statement that best describes the consequences of her withdrawal.

Capitol Two Bank will charge Jasmine a penalty, which she may report as an adjustment to income on her tax return.

Capitol Two Bank will charge Jasmine a penalty, which she must report as interest income on her tax return.

Capitol Two Bank will charge Jasmine a penalty, which she must report as an itemized deduction on her tax return.

Jasmine must report the difference between interest income received and the early withdrawal penalty as interest income on her tax return.