Let x = length of the original rectangle and y = width of the original rectangle
So, Area = A = xy
If the length is increased by 20% and the width is decreased by 20%, the area of the new rectangle is (x + 0.20x)(y - 0.20y) = (1.2x)(0.8y)
= 0.96xy
= 0.96A
So, the area of the new rectangle is 96% of the original area. In other words, the area decreased by 4%.