A bank pays 5% interest per annum for a deposit account . If Ahmed deposits 200 naira in a bank for two years, what will be his total amount in the bank at the end of two years
To calculate the total amount in the bank at the end of two years, we need to calculate the interest earned and add it to the initial deposit.
The formula for calculating simple interest is:
Interest = Principal * Rate * Time
Interest = 200 naira * 5% * 2 years
= 200 * 0.05 * 2
= 20 naira
So, Ahmed will earn 20 naira in interest over two years.
Total amount = Initial deposit + Interest
= 200 naira + 20 naira
= 220 naira
Therefore, Ahmed will have 220 naira in the bank at the end of two years.