The difference between the C.I. in 1 year and compound in interest in 2 years on ₹ 4,000 at 5% per annum is:

1. ₹ 10

2. ₹ 210

3. ₹ 200

4. ₹ 410

For 1st year:

P = ₹ 4,000

R = 5%

T = 1 year

$\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{4,000 \times 5 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{20,000}{100}\\[1em] = ₹ 200$

And

$\text{Amount = P + Interest}\\[1em] = ₹ 4,000 + 200\\[1em] = ₹ 4,200$

For 2nd year:

P = ₹ 4,200

R = 5%

T = 1 year

$\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{4,200 \times 5 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{21,000}{100}\\[1em] = ₹ 210$

And

$\text{Final amount = P + Interest}\\[1em] = ₹ 4,200 + 210\\[1em] = ₹ 4,410$

And

$\text{Compound Interest = Final amount - Original Principal}\\[1em] = ₹ 4,410 - ₹ 4,000\\[1em] = ₹ 410$

Difference between the C.I. in 1 year and compound in interest in 2 years = ₹ 410 - ₹ 200 = ₹ 210

Hence, option 2 is the correct option.