For example the end of year one interest payment would be 10000 x 10 1000. The compound interest is calculated on the principal as well as the amount that gets accrued over the set period of time. Now multiple this number by the total principal interest is always calculated on your principal not your monthly payment.
The formula for compound interest including principal sum is.
Simple Interest 560. Let the principal be P. P V P M T i 1 1 1 i n PV is the loan amount PMT is the monthly payment. Rate - The interest rate per period.