Aer/Gross P.a Savings Account Interest Rate

[has]

Good afternoon, I need someone to explain to me what I'm doing wrong when I calculate the following savings interest rate.
This account is a Digital Regular Saver account provided by NatWest, but all interest rates I'm getting the wrong answers, so I'm thinking I'm doing something wrong.....

So, NatWest states; AER/Gross p.a (variable) - 5.12% / 5.00%

So, as an example, if £10 was saved each month for 12 months, that would be £120 per year.
120 x 5.12% = £6.14

However, the example NatWest provides is as follows;

£10 per month x 12 months = £120 + Interest earned = £3.31

So, my question is why? What am I doing wrong? How is my calculation almost double what NatWest states?

Other banks are very similar so it's not just NatWest, but I just can't work out why?

Thanks for your time...

[237SJ]

£120 hasn't been in the a/c for a whole year - it's been building up gradually so it's not 5.12% of £120. That's how I would understand it.

[barry1010]

237 is right.

[bobbinwales]

so on average over the year you'd of had a balance of £60. At 5.12% pa thats abit over £3 interest