Instead of working with percentage multipliers, pick an easy number for the radius and track the actual values.
Let the original radius be $r = 100$. Since circumference is proportional to radius, a 5% rise in circumference makes the new radius $105$. Old area is proportional to $100^2 = 10000$, and new area is proportional to $105^2 = 11025$. The increase is $11025 - 10000 = 1025$, which is $\frac{1025}{10000} \times 100 = 10.25\%$ of the old area.
Let's summarize:
This confirms option B, 10.25%, using plain numbers instead of algebra.