First, convert the 20% to a real mathematical number. For percents, this is always done by dividing the 20% by 100%, or 20% / 100% = 0.200.
Second, find out what 20% of $120 is. This is the amount of the sale discount. This is always found by mulitplying 0.200 by the item's cost $120, like this:
So for this sale, you'll save $24.00 on this item.
This means, the cost of the item to you is
Alternatively, you can think about it this way. The item is 20% off. This means you'll pay 80.000% of the total cost (100% - 20% = 80.000%).
Now what's 80.000% of the total cost?