Explanation:

Let’s get to the heart of this:

- We’re dealing with compound interest on Rs5,000 at 10% per year, for 2 and 3 years. We want the difference in interest earned between 2 years and 3 years.

- End of 2 years:

Amount = 5000 × (1.1)^2 = 5000 × 1.21 = Rs6,050.

Interest for 2 years = 6,050 – 5,000 = Rs1,050.

- End of 3 years:

Amount = 5000 × (1.1)^3 = 5000 × 1.331 = Rs6,655.

Interest for 3 years = 6,655 – 5,000 = Rs1,655.

- Difference in interest is 1,655 – 1,050 = Rs605.

Now, let’s match with options:

- Option 1, Rs506: Too low.

- Option 2, Rs605: Right on the money.

- Option 3, Rs560: Close, but not it.

- Option 4, Rs650: Over by a bit.