If $500 were placed in a savings account that pays 2.

Simple interest is calculated as I = P × R × T, where P = principal ($500), R = annual interest rate (2.5% = 0.025), and T = time (5 years). I = $500 × 0.025 × 5 = $62.50. Option A ($12.50) is the interest for one year. Option C ($625) and Option D ($6,250) are incorrect, likely from misapplying the rate or time. This question tests interest calculations in the Accounting and Finance category.