how can we know that this is simple past or this is continues past

By the help of Auxiliary verb/helping verb and main verb.

Simple past structure - 1. Affirmative - Sub + verb 2nd form + objective. 2. Negative - Sub + did + not + verb 1st form + objective. 3. Interrogative - did/ Wh words + sub + verb 1st + objective. past continuous - 1. Affirmative - Sub + was/were + verb + ing + objective. 2. Negative - Sub + was/were + not + verb + ing + objective. 3.Interrogative - was/were + sub + verb + ing + objective.

Simple past He worked / I played / We studied Continues past He was working / I was paying / We were studying.