$$\textbf{Step -1: Write the formula of variance.}$$
$$\textbf{Variance = }$$$$\mathbf{ \dfrac{1}{n}\sum \left ( x_{i}-\bar{x} \right )^{2}}$$
$$\text{ where n is the number of observations}$$
$$x_{i}\text{ is the observations}$$
$$\bar{x}\text{ is mean value of the observations.}$$
$$\textbf{Step -2: Find }$$ $$\mathbf{\sum \left ( x_{i}-\bar{x} \right )^{2}}$$
$$\text{Let }x_{_1}, x_{_2}, ……x_{_{20}}\text{ are the observations.}$$
$$\text{We have, Variance = 5, n = 20}$$
$$\text{Variance} = \dfrac{1}{n}\sum \left ( x_{i}-\bar{x} \right )^{2}$$
$$\Rightarrow\dfrac{1}{20}\sum \left ( x_{i}-\bar{x} \right )^{2}=5$$
$$\Rightarrow\sum \left ( x_{i}-\bar{x} \right )^{2}= 100 \boldsymbol{\qquad\rightarrow(1)}$$
$$\textbf{Step -3: Write new observations.}$$
$$\text{Multiplying all observations with 2, we get new observations }y_{1}, y_{2}, ……y_{20}$$
$$\text{Where }y_{i}= 2x_{i} \boldsymbol{ \qquad\qquad→(2)}$$
$$\textbf{Step -4: Calculating the mean of y(new observations).}$$
$$\bar{y}=\dfrac{1}{n}\sum y_{i}$$
$$=\dfrac{1}{20}\sum 2x_{i}$$
$$=2\left \{ \left ( \dfrac{1}{20} \right )\sum x_{i} \right \}$$
$$=2\bar{x} \qquad\qquad \boldsymbol{ →(3})$$
$$\textbf{Step -5: Find }$$$$\mathbf{\sum \left ( y_{i}-\bar{y} \right )^{2}.}$$
$$\text{From equation 1, we can write,}$$$${\sum \left ( x_{i}-\bar{x} \right )^{2}=100}$$
$${\Rightarrow\sum \left ( \dfrac{1}{2}y_{i}-\dfrac{1}{2}\bar{y} \right )^{2}=100}$$ $$\textbf{[ From equation 2 and 3 ]}$$
$$\Rightarrow \left (\dfrac{1}{2} \right ) ^2\sum \left ( y_{i}-\bar{y} \right )^{2}=100$$
$$\Rightarrow \sum \left ( y_{i}-\bar{y} \right )^{2}=400$$
$$\textbf{Step - 6: Calculate new variance.}$$
$$\text{New variance}=\left (\dfrac{1}{n}\right )\sum \left ( y_{i}-\bar{y} \right )^{2}$$
$${=\dfrac{1}{20}\times 400=20}$$
$$\therefore\text{The new variance of resulting observation is 20.}$$
$$\textbf{Hence, the correct option is C.}$$