This can also be demonstrated in terms of the meaning of permutations, rather than the formula.
P(n,r) is the number of ways to permute r of n objects. Consider one of those objects, perhaps the last one in the given list. Call it X. Each permutation either includes X, or does not. These are mutually exclusive.
Each permutation not including X is a permutation of r of the other n-1 objects, so there are P(n-1,r) of them.
Each permutation including X places X in one of the r locations, and fills in the remaining r-1 places from the remaining n-1 objects, so this can be done in rP(n-1,r-1) ways.