Can some one PLEASE explain compound interest to me in lamens terms?

say you buy a saving bond that will mature in 2 years compounded semi-anually at 5%. at the end of 6 months they will figure how much interest it has earned and add it to what you started with. so the second 6 months you have a little more than u started with and u get 5% on the higher amount and they would do the same thing every 6 months till the 2 years is up. hope this helps