The difference between C.I. and S.I. in 2 years on ₹ 4000 at 10% per annum is :

1. ₹ 840

2. ₹ 800

3. ₹ 400

4. ₹ 40

For S.I. :

P = ₹ 4000

R = 10%

T = 2 years

I = $\dfrac{P \times R \times T}{100} = \dfrac{4000 \times 10 \times 2}{100}$ = ₹ 800.

For C.I. :

For 1st year :

P = ₹ 4000

T = 1 year

R = 10%

I = $\dfrac{P \times R \times T}{100} = \dfrac{4000 \times 10 \times 1}{100}$ = ₹ 400.

Amount = P + I = ₹ 4000 + ₹ 400 = ₹ 4400

For 2nd year :

P = ₹ 4400

R = 10%

T = 1 year

I = $\dfrac{P \times R \times T}{100} = \dfrac{4400 \times 10 \times 1}{100}$ = ₹ 440.

Amount = P + I = ₹ 4400 + ₹ 440 = ₹ 4840.

C.I. = Final amount - Initial principal = ₹ 4840 - ₹ 4000 = ₹ 840

Difference between C.I. and S.I. = ₹ 840 - ₹ 800 = ₹ 40.

Hence, Option 4 is the correct option.