A certain car factory used

to produce 500 cars per month. Due to increased demand, they decided to increase production by 25%. How many cars are they now producing per month?

First, calculate the increase in production:

25% of 500 = 0.25 * 500 = 125

Now, add the increase to the original production:

500 + 125 = 625

Therefore, the car factory is now producing 625 cars per month.