$AC$ intersects $BC$ at a right angle, (this can be proved by noticing that the slopes of the two lines are negative reciprocals of each other) so $\triangle ABC \sim \triangle BED$. The hypotenuse of right triangle BED is $\sqrt{1^2+2^2}=\sqrt{5}$.
\[\frac{AC}{BC}=\frac{BD}{ED} \Rightarrow \frac{AC}{BC} = \frac21 \Rightarrow AC=2BC\]
\[\frac{AC}{AB}=\frac{BD}{BE} \Rightarrow \frac{AC}{1}=\frac{2}{\sqrt{5}} \Rightarrow AC=\frac{2}{\sqrt{5}}\]
Since $AC=2BC$, $BC=\frac{1}{\sqrt{5}}$. $\triangle ABC$ is a right triangle so the area is just $\frac12 \cdot AC \cdot BC = \frac12 \cdot \frac{2}{\sqrt{5}} \cdot \frac{1}{\sqrt{5}} = \boxed{\textbf{(B)}\ \frac15}$
Three unit squares and two line segments connecting two pairs of vertices are shown. What is the area of $\triangle ABC$?


$\textbf{(A)}\ \frac16 \qquad\textbf{(B)}\ \frac15 \qquad\textbf{(C)}\ \frac29 \qquad\textbf{(D)}\ \frac13 \qquad\textbf{(E)}\ \frac{\sqrt{2}}{4}$