Consumer math: a discount problem

Tutoring math, consumer situations come up. The tutor mentions a common type.

Let’s imagine an item is on sale for 1.25. A sign underneath it reports savings of 37 percent. What would be the regular price of that item?

Let x be the regular price. Next, realize that if the discount is 37 percent, then 1.25 is 63 percent of the regular price, since 37 + 63 = 100. Therefore, 0.63x = 1.25. Dividing both sides by 0.63, one gets x=1.25/0.63, which is 1.98 (rounded to the nearest cent). Therefore, the regular price of the item would be 1.98.