1. Problem: Reduce the fraction $\frac{2}{4}$ to its lowest terms. 2. Formula: To reduce a fraction to its lowest terms, divide the numerator and denominator by their greatest common divisor (GCD). 3. Find the GCD of 2 and 4. The factors of 2 are 1, 2. The factors of 4 are 1, 2, 4. The greatest common factor is 2. 4. Divide numerator and denominator by 2: $$\frac{2 \div 2}{4 \div 2} = \frac{1}{2}$$ 5. Explanation: By dividing both numerator and denominator by their GCD, we simplify the fraction without changing its value. 6. Final answer: $\frac{2}{4} = \frac{1}{2}$