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**Hint:**We first discuss the process of rounding off and discuss all possible choices. We then take the given decimal $0.0505$ and try to round it off till three decimal places using the formulas.

**Complete step-by-step solution:**

We need to round off the value of the decimal $0.0505$.

In case of any decimal round off we have to be mainly concerned about the terms after the decimal.

We always need to follow some rules for rounding off decimal numbers.

The main number deciding the round off is 5 as it is the middle valued number of the 10 digits.

We will start the process of rounding off from the right end part of the decimal.

If the last possible digit is less than 5 then in case of round off, we just omit the digit.

If the digit is greater than 5 then we omit the digit after adding 1 to its preceding digit.

In case the digit is equal to 5 then we need to consider its preceding digit. If the preceding digit is odd then we add 1 to that digit but if the digit is even, we don’t add 1.

In every case we have to omit the last digit.

We follow these formulas till the place of the number we need to round off the decimal.

For $0.0505$, we need to round off 1 time for three places after decimal.

**The last digit is 5 and the preceding digit is 0 which is even. That’s why we round off $0.0505$ to $0.05$.**

**Note:**Rounding numbers means adjusting the digits (up or down) to make rough calculations easier. The result will be an estimated answer rather than a precise one. Round off helps in scientific forms.

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