Compute a compound percentage: What is 5% of 50% of 500?

Introduction / Context:
Nesting percentages is equivalent to multiplying the base by the product of the corresponding decimal fractions. This question checks order and fraction conversion accuracy.

Given Data / Assumptions:

• Base number = 500.
• Percentages: first 50%, then 5% of that result.

Concept / Approach:
Compute 50% of 500 first, then take 5% of that answer. Alternatively, multiply directly by 0.50 * 0.05 = 0.025 to get the same result in one step.

Step-by-Step Solution:

Verification / Alternative check:
Direct: 500 * (0.50 * 0.05) = 500 * 0.025 = 12.5. Both procedures agree.

Why Other Options Are Wrong:

• 25 and 6.25: These correspond to doubling or halving errors in one of the steps.
• 1.25: Off by a factor of 10; likely from using 0.005 instead of 0.05.

Common Pitfalls:
Mixing up the order or misplacing the decimal point when converting percentages to decimals.

Final Answer: