Population of a town increase 2.5% annually but is decreased by 0.5% every year due to migration. What will be the percentage increase in 2 years?

Answer: Option B

Net percentage increase in Population = (2.5 - 0.5) = 2% each year.
Let the Original Population of the town be 100.
Population of Town after 1 year = (100 + 2% of 100) = 102.
Population of the town after 2nd year = (102 + 2% of 102 ) = 104.04
Now, % increase in population = $$\frac{4.04}{100}\times 100=4.04\%$$

Mind Calculation Method:
100 == 2% Up(1^st year) ==> 102 == 2%Up(2^nd year) ==> 104.04
% population increase in 2 years = 4.04%.