The price of an item is increased by 25% and then decreased by 20%.

Using multipliers: a 25% increase multiplies by 1.25, and a 20% decrease multiplies by 0.8. Net multiplier = 1.25×0.8 = 1.0, i.e. the price returns exactly to its original value — no net change. This is a classic trap: successive percentage changes of +x% and −y% cancel exactly when (1+x/100)(1−y/100) = 1, which happens here because 1.25 and 0.8 are reciprocals of each other.