A price is increased by 25%. By what percent must the new price then be decreased so that the final price equals the original price…

Use multipliers. Increasing by 25% multiplies the price by 1.25. To return to the original price, a second multiplier $m$ must satisfy $1.25m = 1$, so $m = 0.8$. A multiplier of 0.8 means a 20% decrease. Check with $100: it rises to $125, and 20% of 125 is $25, which brings it back to $100. The common wrong answer is 25, which assumes the decrease should match the increase. But the 25% applies to the larger new price, so a smaller percent is enough to remove the same dollar amount. The percent is relative to a different base each time.