I'm not a math teacher, but I love this question. Here is what you have to do:
If $16 is the 20% off price, this amount is equivalent to 80% (100% minus 20%), and the question is asking for what the 100% price was. Therefore, when 80% equals $16 and 100% equals x, you calculate:
($16 x 100) / 80 = $20
Hence, the original price was $20.
You can always double check your answer by saying: $20 minus 20% ($4) = $16, so it is correct.