Question about Calculating LTV (Lifetime Value)?

There's a really easy-to-use Excel file for calculating LTV here:

https://thepathforward.io/customer-lifetime-value-how-to-model-it-how-to-measure-it/

A screenshot from it is attached.

I get that the average spend per booking ($105) times 5 years times 65% margin = $341. That makes sense.

What I can't figure out yet is how retention rate is being applied. The spreadsheet has retention rate (the constant labelled r) at 50%. With only half the customers being retained every year, shouldn't the average LTV shown in LTV 3 (which includes the retention rate) be closer to $341 / 2 = $170?

Thanks very much in advance for any tips that would help clear this up.