A 500-character limit is not a 500-word limit. Words describe separated pieces of text; characters count the units that make up the text, including punctuation and, depending on the counter, spaces. Check the exact metric your submission form requests before cutting a draft.
The text red blue contains two whitespace-separated words and eight ordinary characters including the space. Excluding whitespace leaves seven. Adding a period makes the character total nine without creating another word.
TheDailyUtils counts words by splitting nonempty text at whitespace. That means well-written is one word in this tool, and well written is two. A destination editor may use a different rule for hyphens, apostrophes, or languages that do not separate every word with spaces.
For a strict limit, leave a small margin rather than targeting the last available character. Formatting conversions and the destination's counting rules can change the result.
A page can contain very different amounts of text depending on font, spacing and margins. Use the counter on the final wording. A page estimate is useful for planning, but it is not a substitute for the actual metric used by an application, assignment or publishing form.