If ruling gradient is I in 20 and there is also a horizontal curve of radius 76 m, then the compensated grade should be A. 3 % B. 4% C. 5 % D. 6%

The correct answer is $\boxed{\text{B. 4%}}$.

The compensated grade is the maximum allowable grade for a horizontal curve. It is calculated by taking the ruling gradient and multiplying it by a factor that depends on the radius of the curve. The factor is called the cant deficiency factor, and it is equal to $1 – \frac{r}{200}$, where $r$ is the radius of the curve in meters.

In this case, the radius of the curve is 76 m, so the cant deficiency factor is $1 – \frac{76}{200} = 0.88$. The compensated grade is therefore equal to $1 \text{ in } 20 \times 0.88 = 4\%$.

The other options are incorrect because they do not take into account the radius of the curve.