What is the difference between these two sentences:
1) We have been working on this for last two days. 2) We are working on this for last two days
Please explain it to me.
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Your sentence 1 uses the Present Perfect Progressive. This tense is used to describe an action that was started in the past and either has just stopped or continues at the moment.
Sentence 2 uses the Present Continous. This tense is used to describe actions that are taking place now, at this exact moment (in our case), or will take place in the future.
We may use time expressions with the Present Continuous, but these time expressions usually underscore the currency of the action:
We are working on this / at the moment / currently / now.
I doubt that the time expression for the last two days is compatible with the Present Continuous, because two days is quite a stretch of time.
As ColleenV said in a comment below, this time expression effectively puts the action in the past, which is not okay. With the Present Continuous, our time markers should be either momentous (now, currently) or refer to the future (for the next two days, next Sunday).