Concept: The question tests on basics of Statistics
If a value x, is added to or subtracted from a set of numbers then the mean increases or decreases by x, but the standard deviation remains unchanged.
If a set of numbers is multiplied by x, then the mean of the new distribution is x times the mean of the original distribution and the standard deviation is also x times the standard deviation of the original distribution = 400.
When the salary is increased by $100, the standard deviation remains unchanged, but when the salaries are increased by 20% (Each salary is multiplied by 1.2), the standard deviation also gets multiplied by 1.2.
Therefore the standard deviation of the new distribution = 400 * 1.2 = 480