Binary-Coded Decimal (BCD) is a method of representing decimal numbers in a binary format. In BCD, each digit of a decimal number is encoded separately using four bits. For example, the decimal number 25 is represented in BCD as 0010 0101, where 0010 corresponds to the digit 2 and 0101 corresponds to the digit 5. BCD is commonly used in digital systems, such as calculators and digital clocks, where precise decimal representation is important. This encoding allows for easy conversion between binary and decimal systems, making it useful in applications that require human-readable output, such as digital displays.