Explanation:

- Simple interest is calculated as:

$$\text{Simple Interest}=\frac{\text{Principal}\times \text{Rate}\times \text{Time}}{100}$$

For Rs 2,000 at 10% for 2 years:

$$\text{Simple Interest}=\frac{2000\times 10\times 2}{100}=Rs400$$

- Compound interest is calculated as:

$$\text{Compound Interest}=\text{Principal}\times {(1+\frac{\text{Rate}}{100})}^{\text{Time}}-\text{Principal}$$

For Rs 2,000 at 10% for 2 years:

$$\text{Compound Interest}=2000\times {(1+\frac{10}{100})}^2-2000$$

$$=2000\times (1.1{)}^2-2000$$

$$=2000\times 1.21-2000$$

$$=2420-2000=Rs420$$

- The difference between compound and simple interest:

$$\text{Difference}=Rs420-Rs400=Rs20$$

- Option:1, Rs20

- Option:2, Rs40

- Option:3, Rs80

- Option:4, Rs60