Step 1: Formula
Maximum safe speed $v = \sqrt{rg \left( \frac{\mu + \tan \theta}{1 - \mu \tan \theta} \right)}$.
Since $\mu, \theta$ are constant, $v \propto \sqrt{r} \implies v^2 \propto r$.
Step 2: Proportionality
$\frac{r_2}{r_1} = \left( \frac{v_2}{v_1} \right)^2$.
Given $v_2 = 1.2 v_1$, so $r_2 = r_1 \times (1.2)^2 = 20 \times 1.44 = 28.8 \text{ m}$.
Step 3: Increase in Radius
Increase $= r_2 - r_1 = 28.8 - 20 = 8.8 \text{ m}$.
Final Answer: (C)