In the following question, a sentence is given in Indirect speech. Choose the option that best expresses the same idea in Direct speech. He explained that he knew the place well because he used to live there.

Introduction / Context:
This question focuses on reconstructing Direct speech from a reported explanation. The speaker is explaining why he is familiar with a particular place. It tests understanding of how the present tense "know" and the past habitual phrase "used to live here" work together in a natural sentence, and how they relate to the reported form "knew" and "used to live there".

Given Data / Assumptions:

• Indirect speech: He explained that he knew the place well because he used to live there.
• "Knew the place well" is past tense in the reported form.
• "Used to live there" indicates a past habitual action or state.
• The reporting verb "explained" is in the past tense and describes giving a reason.
• We assume that in Direct speech the speaker is likely to say "I know the place well" in present tense because the knowledge is still valid.

Concept / Approach:
In Indirect speech, present tense verbs usually change to past tense when reported with a past reporting verb. Therefore, "I know the place well" becomes "he knew the place well". When reversing this, we should restore the natural present tense "I know" because the explanation suggests current familiarity. The phrase "there" in Indirect speech usually corresponds to "here" in Direct speech when the speaker is at the location. The structure "used to live" already has a past sense and often remains the same when moving between Direct and Indirect speech.

Step-by-Step Solution:

Verification / Alternative check:
The resulting sentence is natural: the speaker is explaining his present knowledge based on past residence. The present tense "know" correctly matches the general rule that reported present often comes from original present, and "used to live here" clearly describes a past condition that no longer continues. The pronouns and adverb of place are now from the speaker's point of view, which is correct for Direct speech.

Why Other Options Are Wrong:
Option A contains the incorrect form "use to live" without the letter "d", which is a common spelling mistake. Option C uses "knew the place", which moves the main verb unnecessarily into the past in Direct speech, making the sentence sound less natural. Option D uses "have known", which is present perfect and not clearly suggested by the reported form "knew". The most faithful and grammatical reconstruction is therefore option B.

Common Pitfalls:
Learners frequently spell "used to" as "use to" and forget that the correct past habitual form requires the "d". Another problem is assuming that every reported past tense must remain past in Direct speech, when in fact many of these forms come from an original present tense. Paying attention to current relevance and natural English patterns helps choose the right tense when reconstructing Direct speech.

Final Answer:
The correct Direct speech form is "I know the place well because I used to live here," he explained.