Let's begin by listing out the information given to us:
Bottled water = $1.25
Markup = $0.20
[tex]\begin{gathered} OriginalCost+Markup=SalePrice \\ Markup=0.25,SalePrice=1.25 \\ OriginalCost=1.25-0.25 \\ OriginalCost=1.25-0.25=1.00 \\ OriginalCost=1.00 \end{gathered}[/tex]Markup percent is given by the ratio of the Markup to the Original cost:
[tex]\begin{gathered} 0.25\colon1.00 \\ \text{Divide both sides by 0.25, we have:} \\ \frac{0.25}{0.25}\colon\frac{1.00}{0.25}\Rightarrow1\colon4 \\ 1\colon4\Rightarrow\frac{1}{4}=0.25 \\ 25\text{percent} \end{gathered}[/tex]Therefore, the markup is 25% of the original cost
