To calculate how much interest will he earn in 2 years we can use the following formula:
Where A is the amount of money in the account after t years, P is the initial deposited amount and r is the interest rate in decimal form.
From the given information we know that r equals 0.05 (5%), P equals $20 and t equals 2 years, by replacing these values into the above formula, we get:
Then, after 2 years there will be $22.05 in the account. The interest earned can be calculated by subtracting the initial amount of money ($20) from the amount of money in the account after 2 years ($22.05), like this:
Earned interest = 22.05 - 20 = 2.05
Then, he will earn $2.05 in 2 years