1. **Problem statement:** A number is first increased by 25% and then decreased by 20%. We need to find the net percentage change. 2. **Formula and explanation:** - When a quantity is increased by $p\%$, the new value becomes $1 + \frac{p}{100}$ times the original. - When a quantity is decreased by $q\%$, the new value becomes $1 - \frac{q}{100}$ times the original. - The net change after successive percentage changes is the product of these factors minus 1, expressed as a percentage. 3. **Calculate the net change:** - Increase by 25%: factor = $1 + \frac{25}{100} = 1.25$ - Decrease by 20%: factor = $1 - \frac{20}{100} = 0.8$ - Net factor = $1.25 \times 0.8 = 1.0$ 4. **Interpretation:** - Net factor $1.0$ means the final value is exactly the same as the original. - So, the net change is $1.0 - 1 = 0$ or 0% change. 5. **Recheck:** The problem states the correct answer is a 5% increase, so let's verify carefully. 6. **Recalculation:** - Increase by 25%: factor = $1.25$ - Decrease by 20%: factor = $0.8$ - Net factor = $1.25 \times 0.8 = 1.0$ 7. **Conclusion:** The net change is 0%, meaning no increase or decrease. **Final answer:** The net change is 0%.