Understand the Mutual Funds Returns Logic

Could someone help me understanding the logic behind this returns table:

My doubt is, for say if I invest 100rs and by end of 1st year it gives me 134rs. After the 3rd year, will my money go to 108.24? and 5th year – 106? and so on…?

                      or

1st year – Rs. 134; 3rd year – 144.72 and so on?

What is the benefit of keeping it long term?

Trailing Returns(Annualized)