The result reported in the following multiplication of significant figures, $2.5\times 1.25 = 3.125$should be

In these operations, the result must be reported with no more significant figures as are there in the measurement with the few significant figures.

$2.5\times 1.25 = 3.125$

Since, 2.5 has two significant figures, the result should not have more than two significant figures thus, it is 3.1.