Your math is just wrong all over. You're using the wrong formulas and confusing yourself.
If your monthly payment is 1000 and you pay an extra 50, you take 50 off the principle. That means next year you pay 50*rate less in interest for all years in the future. Assuming you don't change the payments (and assuming fixed rate loans), this means for the same amount of monthly money you pay off 50*rate more each year. That's a savings of rate compounded annually. That's all the return you get.