Step 6: Now make a copy of the selection made inside the Magnifying glass by selecting the Layer-via-copy option from the Layer Menu.

Step 7: Now we will enlarge the inside portion by actually decreasing the size of the outer image. To do this we will select the Free Transform option from the Edit Menu.

Now decrease the height and the width of the image by equal proportions I have reduced the size to 87% x 87% respectively.