10% of $35.50 = 0.10*35.50 = 3.55
If Julia goes with the 10% option, then she will tip $3.55
But she instead goes with the $5 tip because it's the larger of the two options. If the result of 10% of $35.50 was larger than 5, then she'd go with the 10% option instead.
Answer: $5