On Paper and Breadboarding: 7805 Voltage Regulator and Recommended Capacitor Configuration
The 7805 Voltage regulator outputs 5 volts and requires at least 8 volts at the input (high dropout voltage). The middle pin is connected to ground.
Capacitors are needed to reduce the peak to peak (pk-pk) voltage difference which is considered noise from the power supply. The capacitors can also reduce interference from outside sources and from devices in the circuit.
A 10uF (microFarad) capacitor is used at the input side.
A .1uf capacitor is used at the output side.
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