Edit:Made a substantial mistake; see this link for an explanation!
Compound Interest - Periodic Compounding
The wording threw me.
Essentially what this means is that you receive a 3.2% compound after the first 6 months, then a 3.2% compound after the next 6 months.
The starting amount is
This is compounded by after months:
...Then it's compounded again after another months:
So after one year, you have
And after T years:
I think they've missed out a decimal place in their answer, otherwise I have the same result.