When a principal is promised with an interest to be compounded annually, the amount after one year becomes the principal for the next year. So, $\frac{10}{100}\times 400000=40,000$
₹40,000 added to ₹4,00000 would be the new principal for the next year i.e. 4,40,000. The interest for the second year is calculated on the new principal amount: $\frac{10}{100}\times 440000\times 1=44,000$
So, the final amount after 2 years(compounded annually with 10% interest) = ₹440000 + 44000 =  ₹4,84,000.

If the principal would have been deposited for an annual simple interest for 10% for a period of two years would be $\frac{10}{100}\times 400000\times 2=80,000$
Therefore amount =  ₹4,00000 + ₹80,000 =  ₹4,80,000.

So, compound interest is ₹4,000 more than a simple interest for a period of two years.