After 2 years the price of the flat will be
1,00,000 * (1 + 10/100)2 = 1,00,000 * (11/10)2 = 1,21,000 [Calculated in compound interest]
After 2 years the price of the plot of land will be
1,10,000 * (1 + 5/100)2 = 1,10,000 * (105/100)2 = 121275 [Calculated in compound interest]
So, the plot has higher price than the flat.
Therefore, Ram will pay (121275 - 121000) = 275 rs. to Prem