Final answer:
Karen's penalty for early withdrawal from her CD cannot be calculated without specific information on the penalty terms. The question seems to imply that an answer can be chosen from multiple choices, but the necessary details about the CD's penalty fees are missing.
Step-by-step explanation:
Karen deposited $7,000 for 3 years in a certificate of deposit at 8.5% interest. After 6 months she withdrew the entire amount. To calculate the penalty for early withdrawal, one would need to know the terms of the CD, which include the penalty fees and whether they are flat fees or a percentage of the interest earned. Without this specific information, the actual penalty cannot be calculated. However, the question appears to be a multiple-choice one, suggesting that the penalty can somehow be inferred from the given options.
In similar questions that provide formulae for calculating interest, such as Simple interest $100 Deposit at a simple interest rate of 5% held for three years is: $100 × 0.05 × 3 = $15, we use the principal, the rate, and the time to calculate the interest earned. If the penalty was a percentage of the interest that would have been earned, one could calculate the interest for the full term and base the penalty on this figure. However, without the information on the penalty's structure or percentage, one cannot deduce the correct answer from the options provided (A, B, C, D).