The best way to take care of this question is to look at how much each approach costs, and consider how much he saves by buying the whole year rather than by going month-to-month.
Paying for the whole year is given in the question: $225
Paying for the whole month requires us to multiply the monthly rate by 12 for each month in the year:
Cost for approach 2: `$30xx 12 = $360`
To calculate the discount, we consider the difference over the original cost:
`D = ($360-$225)/($360) = ($135)/($360) = 0.375`
To get the desired percentage, we simply multiply by 100 and denote with a percentage symbol, giving us the discount he receives: 37.5%.