With \(y_1=y_0+h\,f(t_0,y_0)=1+0.5\cdot 1\) we get \(1.5\). The value \(1.05\) comes from using \(h=0.05\), and the value \(2\) comes from doubling the slope without multiplying by \(h\).
Euler's method approximates the solution of an initial value problem \(y'=f(t,y)\), \(y(t_0)=y_0\), advancing in steps of size \(h\) using the slope at the current point.