Simple Interest is calculated as follows:
A = P(1 + rt)
where:
A = final amount
P = initial principal balance
r = annual interest rate (as decimal)
t = time (in years)
In this case, P = 20,000, r = 0.03, and t = 2. Replacing into the equation:
A = 20000(1 + 0.03*2)
A = $21,200
Then, he earns $21200 - $20000 = $1200 in two years. Given that two years has 24 months, he earns $1200/24 = $50 per month
