To find the area of a circle, you can use the formula:
\[ A = \pi r^2 \]
where \( r \) is the radius of the circle. Since the diameter \( d \) is given as 5 inches, the radius \( r \) is half of the diameter:
\[ r = \frac{d}{2} = \frac{5}{2} = 2.5 \text{ inches} \]
Now, substitute the radius into the area formula:
\[ A = \pi (2.5)^2 \]
Calculating \( (2.5)^2 \):
\[ (2.5)^2 = 6.25 \]
Now, substitute this back into the area formula:
\[ A = \pi \cdot 6.25 \]
So the area in exact form is:
\[ A = 6.25\pi \text{ square inches} \]
Thus, the exact answer for the area of the circle is:
\[ \boxed{6.25\pi} \text{ square inches} \]