The acceleration due to gravity at a height \( h \) above the Earth's surface is given by:
\[
g_h = \frac{g}{\left( 1 + \frac{h}{R} \right)^2}
\]
We are given that \( g_h = \frac{g}{16} \). Thus:
\[
\frac{g}{16} = \frac{g}{\left( 1 + \frac{h}{R} \right)^2}
\]
Simplifying:
\[
16 = \left( 1 + \frac{h}{R} \right)^2
\]
Taking square roots:
\[
4 = 1 + \frac{h}{R}
\]
Thus:
\[
\frac{h}{R} = 3 \quad \Rightarrow \quad h = 3R
\]
Therefore, the correct answer is (B).