Annually compounded interest

Question: Let's say I have $100 in a savings account. I was told that it would be compounded annually at 10%. What does that mean?

It means that the bank will add 10% of my original amount to my savings each year and it will go up to $110 after the first year. I can get to this number by using this math equation. A= P(1+r)n

P: is the original amount deposited
r: is the annual/ yearly rate of interest
n: is the number of years the money has stayed in the account
A: is the amount of money in the account after n amount of years, this includes the added interest

The trick is to exponentially raise (1+r) by n rather than mutiply it after the first year.
An example would be calculating annual compounded interest after three years. Then the equation would look like this:
A=P(1+r)ⁿ where the n would be the three years.

So after three years, I would have $133.1 in my account.