Step 1 :
Divide $ 500 $ by $ 40 $ and get the remainder

$$ 500 : 40 = 12 \text{ ( remainder is } \color{blue}{ 20 } \text{ ) } $$

The remainder is positive ($ 20 > 0 $), so we will continue with division.

Step 2 :
Divide $ 40 $ by $ \color{blue}{ 20 } $ and get the remainder

$$ 40 : \color{blue}{ \boxed { 20 }} = 2 \text{ ( remainder is } \color{blue}{ 0 } \text{ ) } $$

The remainder is zero => GCD is the last divisor $ \color{blue}{ \boxed { 20 }} $.

This solution can be visualized using a Venn diagram.

The GCD equals the product of the numbers at the intersection.

GCD Calculator