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Explanation:

After 2 years, the price of the flat will be (1)(1.10)2 = Rs.1.21 lakh.
Correspondingly the price of the land will be (1.1)(1.05)2 = Rs.1.21275 lakh.
Hence, the price of the plot = Rs.(1.21275 – 1.21) lakh = Rs.275 more than that of the flat.
Hence, if they exchange, Ram will have to pay this amount to Prem .

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