Specific examples of addition of interest to principal
First, the addition of interest to principal is calculated. The incurred interest is: 20,000 yen × 15% × 31 days / 365 days ≈ 254 yen.
254 yen is added into the outstanding borrowing amount. After the addition of interest to principal, the outstanding borrowing amount becomes 20,000 yen + 254 yen = 20,254 yen.After the addition of interest to principal, automatic payment of the monthly repayment amount (5,000 yen) is made from the Seven Bank Account (ordinary deposit). After the monthly repayment, the outstanding borrowing amount becomes 20,254 yen – 5,000 yen = 15,254 yen.