Concept:
When converting direct speech into indirect (reported) speech, three main changes usually occur if the reporting verb is in the past tense: Tense shifting (Backshifting), Pronoun changes, and Time/Place adverbial changes.
Step 1: Analyze the Reporting Verb and Tense.
The reporting verb is "said" (Past Tense). This means the tense inside the quotation marks must shift backward:
• Direct: "I am studying" (Present Continuous)
• Indirect: "She was studying" (Past Continuous)
Step 2: Adjust Pronouns and Adverbs of Time.
• Pronoun: The first-person "I" refers to the speaker ("She"), so it changes to the third-person "she".
• Time Adverb: The word "now" in direct speech always changes to "then" in indirect speech to reflect the shift in time.
Step 3: Comparing the options.
Option (A) incorrectly changes "said" to "says." Option (B) fails to change "now" and uses the wrong tense. Option (C) fails to shift the tense of "is studying." Option (D) correctly applies all rules: She said + that + she + was studying + then.
Final Answer: Option D