I solved it differently, in a more convoluted way, but got the same result. Would this be considered the correct answer and a full grade?
20*.4 - (20*.4)x = 20 * 0.25
so basically x is the percentage here, not the amount, so it is one extra step: once we get percentage we can calculate the amount.

How do you solve ANY problem like this? Looking for a universal way of converting words to formulas. What key words should I look to determine would the unknown x should be and go from there?