In joint variation, the quantity varies directly as the product of two or more other quantities. So the equation for z would be:
z = kxy2
where k is a constant. When we increase x by 25%, it becomes 1.25x. When we reduce y by 20%, it becomes 0.8y. The equation then becomes
z2 = k(1.25x)(0.8y)2
% change = (1 - z2/z)*100% = {1 - k(1.25x)*(0.8y)2/kxy2 }* 100% = 20%