Step 1: {Understanding the intensity formula in YDSE}
The intensity at any point in YDSE is given by:
\[
I = I_0 \cos^2 \left(\frac{\phi}{2} \right)
\]
where \( \phi \) is the phase difference, given by:
\[
\phi = \frac{2\pi}{\lambda} \times {path difference}
\]
Step 2: {Substituting given values}
For the given path difference \( \Delta x = \lambda/4 \),
\[
\phi = \frac{2\pi}{\lambda} \times \frac{\lambda}{4} = \frac{\pi}{2}
\]
Thus,
\[
I = I_0 \cos^2 \left(\frac{\pi}{4} \right) = I_0 \times \left(\frac{1}{\sqrt{2}}\right)^2
\]
\[
I = \frac{I_0}{2}
\]
Thus, the correct answer is \( \frac{I_0}{2} \).