2005 AMC 8 Problem 2

Karl bought five folders from Pay-A-Lot at a cost of \$2.50 each. Pay-A-Lot had a 20%-off sale the following day. How much could Karl have saved on the purchase by waiting a day?

\textbf{(A)}\ \$1.00 \qquad\textbf{(B)}\ \$2.00 \qquad\textbf{(C)}\ \$2.50\qquad\textbf{(D)}\ \$2.75 \qquad\textbf{(E)}\ \$5.00

Full credit goes to MAA for authoring these problems. These problems were taken on the AOPS website.