Correct answer: $10^{-4}$
Since the bullet sticks to the sandbag, the collision is perfectly inelastic and momentum is conserved. The common speed becomes $V=\frac{mv}{m+M}$, so the final kinetic energy of the bullet-sandbag system is much smaller than the bullet’s initial kinetic energy. The ratio is approximately $\frac{m}{m+M}\approx\frac{0.05}{5.05}\approx10^{-2}$ for speed, and for kinetic energy it scales as the square, giving about $10^{-4}$.