understand and understood
If someone explains me something, and I can make sense. Should I reply understand or understood? Which one is correct or it depends on the situation.

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Answer

Even if in chinese you would lay 我明白了 ( the 了 pointing to past event), I would says "I understand" with present tense when you reply to someone in english.

The past tense "understood" would be used for situation when you describe a situation.

Answer

Examples:
I don't understand this at all.
I finally understood what he meant.

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