The speed of a wave on a string is given by:
\[
v = \sqrt{\frac{T}{\mu}}
\]
where \( T \) is the tension and \( \mu \) is the mass per unit length of the string.
The wave speed increases by 20\%, so the new speed is:
\[
v' = 1.2v
\]
The ratio of the new speed to the original speed is:
\[
\frac{v'}{v} = \frac{1.2v}{v} = 1.2
\]
The speed is proportional to the square root of the tension, so we have:
\[
\frac{v'}{v} = \sqrt{\frac{T'}{T}} = 1.2
\]
Squaring both sides:
\[
1.44 = \frac{T'}{T}
\]
Thus, the new tension \( T' \) is:
\[
T' = 1.44T = 1.44 \times 120 = 172.8 \, \text{N}
\]
The percentage increase in tension is:
\[
\text{Percentage increase} = \frac{T' - T}{T} \times 100 = \frac{172.8 - 120}{120} \times 100 = 44\%
\]
Thus, the percentage increase in tension is 44\%.