Let the Original Price be P.

The first reduction of 25% means that the new price is 75% of P = 0.75P

The second reduction of 20% means that the new price is 80% of 0.75P = 80/100 x 0.75P = 0.6P

The overall reduction is therefore 1 - 0.6 = 0.4 which is 40% reduction to the original price

The first reduction of 25% means that the new price is 75% of P = 0.75P

The second reduction of 20% means that the new price is 80% of 0.75P = 80/100 x 0.75P = 0.6P

The overall reduction is therefore 1 - 0.6 = 0.4 which is 40% reduction to the original price