A watch was accurate at noon, but then began losing 30 minutes each hour. The watch currently displays 4 p.m. but stopped working 5 hours ago. What is the actual time now?

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We need to understand how the watch's time relates to the actual time, then determine when it stopped and what the current time is.

First, let's determine how this watch functions. The watch **loses 30 minutes (or 1/2 hour) each hour**. This means that when 1 hour of actual time passes, the watch only advances by 30 minutes (or 1/2 hour).

When the watch moved from 12 noon to 4 p.m., it showed a **4-hour advancement** on its display. But since it only moves half as fast as actual time, the real time that passed was:
4 ÷ (1/2) = 4 × 2 = **8 hours**

Therefore, the watch took 8 hours of real time to advance from 12 noon to 4 p.m. This means the actual time when the watch showed 4 p.m. was:
12 noon + 8 hours = **8 p.m.**

Since the watch stopped 5 hours ago, the current actual time is:
8 p.m. + 5 hours = 13 hours past noon = **1 a.m.**

Therefore, the correct time now is **1 a.m.**

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