We conducted teaching interviews with nine groups of students enrolled in an introductory level algebra-based physics course and consisted of two sessions-a learning session and a transfer session. The students were engaged in hands-on activities to learn various physics ideas in the learning session. We expected the students apply the physics learning to understand positron emission tomography (PET) in a transfer session. After providing worksheets, we asked the students to write their responses before and after the group discussion. To present the dynamics of group learning and the influence of peer scaffolding we compared the results of this study with our prior study  where students were individually engaged with a similar set of activities. Results suggest that peers were effective in activating and challenging each other's conceptual resources as well as facilitating transfer of learning. The results of this study also showed that students' performance was better when they were provided the direct hint instead of graduated hints. However, we found that the students gave the right answer with the wrong reasoning when a direct hint was provided, and they gave wrong answer with relatively better reasoning when the hints were graduated.