5% of (25% of Rs. 1600) is

Find 25% of Rs. 1600

$25\% \text{ of } 1600 = \frac{25}{100} \times 1600 = 400$

Find 5% of that result (Rs. 400)

$5\% \text{ of } 400 = \frac{5}{100} \times 400 = 20$

Therefore, the correct choice is Rs. 20.