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There's a sentence from the exercise book I'm doing (Oxford English Grammar). The book instructs to rewrite this sentence using that-clause:

I understood him to be interested in cooperating.

My first answer was

I understood that he was interested in cooperating.

However, the answer key is

I understand that he is interested in cooperating.

Why does the book use the present verb when its original sentence seems to be in the past?

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It's hard to say, because my instinct is that your answer is correct, but it might be that they are interpreting the first sentence as a reference to a counterfactual in the present tense, what I think is called "subjunctive mood" (not sure about that though). Consider this dialogue:

A: (picks up the phone and dials) B: "He said he doesn't want to work with us. Why are you calling him?" A: "I understood him to be interested in cooperating."

Here you are not saying that you understood something in the past, but are talking about your current belief, as caused by your interpretation of an event in the past. In this case, "I understand that he is interested in cooperating" is a correct rephrase, but with added context. Instead of a flat statement about your current understanding, it now has an implication of disagreement. This is just one example.

The meaning of a sentence in english can be changed by the context surrounding it. Different words and syntax carry different implications that only sometimes overlap. As a result, how you can rephrase a given sentence depends on more than just the words in it.

To summarize: Both answers may be correct. Which one to use depends on additional context outside of the sentence itself. The book uses the present verb, because that carries the implication that fit the imaginary scenario in the authors mind... or they flipped a coin, or it was a typo.

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