Lets say, $P_1$ have cycle time $t_1$, $P_2$ have cycle time $t_2$.
Assuming $CPI(cycles/instruction)= 100$ for $P_1$
Time to execute 1 instruction on $P_1 =$ cycles/instruction * 1 cycle time = $100t_1$
$CPI$ for $P_2=120$ (given)
Time to execute 1 instruction on $P_2 = 120t_2$
But, question says $120t_2$ is $25\%$ less than $100t_1$ which means $120t_2 = 75t_1$,
Question also says, $t_1=1ns (f=1GHz$ means cycle time $= 1ns)$,
So, $t_2 = 0.625 ns$ which is $1.6 GHz$