The narrator is telling us about how he is not crazy (mad), but people think he is. He also tells us about how he can "hear" things and is telling about his plan. The narrator talks about the old man's eye that is faded and it frustrates him.
The narrator gets angry whenever he witnesses the old old man's eye so his plan is to get rid of the old man. He tries many times for a few nights to sneak into his room at midnight.
The narrator does not like the old man's eye and he wants to get rid of him, even though he likes the man. The narrator also likes to see people scared.
On the seventh night that the narrator goes into the old man's room, he accidentally woke him up, but the old man does not know who it is. He hears the old man's fear and his obnoxious heartbeat. He sees the eye. It makes him get mad and the narrator suffocates the old man by putting the bed on top of him, and cut he cut off his limbs and hid the corpse under three planks of wood in the floor.
The next day, the doorbell rings and there are three policemen at the door. They say that the neighbors suspected something last night, but the narrator just made up some story to make him seem innocent. He lets them take a look around and they finally take a seat in the old man's bedroom. The narrator is sitting right on top of where the corpse lays.
As the narrator and the policemen are talking, the narrator keeps hearing the old man's heartbeat and fear in his head. It taunts him. He couldn't take it anymore, so he confessed to the policemen and told them where the old man's corpse was hidden. The narrator felt very guilty.