No. The interest you received last year (104) earns interest this year. So, for the second year then, you earn 0.08 interest on the 104 paid to you last year in addition to the 0.08 earned on the total of 2600 deposited.

(2600+104) * 0.08 = 216.32 not 320, and the value at the end of year 2 is 2,920.32.

You got 320 because you calculated:
(C12+E12)*Expected_rate_of_return; where C12 = 1404 (last year's contrib + int), and E12 = 2600 (Year 1, contrib + year 2 contrib) so that year 1 is added twice and your result is 320 instead of 216...