I've taken up an offer with my bank to save a certain amount of money each month, for a year.
This month, the account matures and I've received a letter from the bank telling me what options are now available to me with the money that has accrued.
One of the options is to take out another account.
But the example they've given of how much money this will earn is significantly different from what I was expecting - but I realised I don't understand enough about how it's worked out 
The example I've been given is that depositing £300 per month, with 5.00% AER (5% gross) will result in a balance of £3,697.50 after 12 months.
I really don't know this figure has been calculated - I thought (presumably naively!), that each month, my £300 deposit would attract 5% interest. And that therefore the next month would be a new contribution of £300, added to what would have become £315.
However, I realise that this isn't the case, because each month my statement just showed the increase by £300 each month - i.e. month one showed a balance of £300, month two of £600, month three of £900, etc.
Therefore, I then assumed that the total for the year, £3600, would attract a 5% interest - which would be £180. But their example shows an increase of just £97.50!
Can someone tell me what's going on here? Is it just me?!
TIA