The watch gains uniformly, which means it gains the same amount of time every hour. We are told that:
The total time between 10:00 AM on Monday and 1:00 PM on Tuesday is 1 day and 3 hours, or 27 hours. During this time, the watch gains 4.5 minutes (from being 2 minutes slow to being 2.5 minutes fast).
To calculate the rate of gain, we divide the total time gained by the total time passed:
Rate of gain
Now, to determine when the watch showed the correct time, we know that the watch was 2 minutes slow at 10:00 AM on Monday. We need to find when it gained those 2 minutes to reach the correct time. The time taken to gain 2 minutes is:
Time taken to gain 2 minutes
Starting from 10:00 AM on Monday, adding 12 hours brings us to 10:00 PM on Monday, which is when the watch shows the correct time.