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\frac{125}{1000}\times \frac{7}{8}
Expand \frac{12.5}{100} by multiplying both numerator and the denominator by 10.
\frac{1}{8}\times \frac{7}{8}
Reduce the fraction \frac{125}{1000} to lowest terms by extracting and canceling out 125.
\frac{1\times 7}{8\times 8}
Multiply \frac{1}{8} times \frac{7}{8} by multiplying numerator times numerator and denominator times denominator.
\frac{7}{64}
Do the multiplications in the fraction \frac{1\times 7}{8\times 8}.