Hold on Vod. He said he was paying the interest monthly so in this case there is no compounding involved.
He writes in post #1 that you can take your interest from month one and reinvest it. That is
compound interest. Interest earned is now gaining it's own interest.
at first month you receive $ 20 interest and you decide to re invest.
so we count as new investment and will be like this :
investment #1 = $ 400 and 11 month remaining.
investment #2 = $ 20 and 12 month remaining.
You cannot exit all after one year.