Simple Interest troubling with new formula

Question

I have learn in my school day Simple Interest can be calculated by $PNR/100,$ where $P$ is principle amount, $N$ is number of years and $R$ is rate of interest. For example, if I take$ P = 100, N = 1$ year and rate of interest $R = 4%$ then Simple interest is $100(1)(4)/100 = 4$, and then total amount to be paid is $100 + 4 = 104$. This is what I know. But, I have seen the following formula for finding the Simple interest and this formula not giving my above cited answer as solution. See this formula. $V= (1+rn)A_0$, in this if we plug $r = 4, n = 1$ and $A_0$ $= 100$, we get $V = 500.$ It is too more. Where I am wrong?, please explain.

Answer 1

The $R$ in your first formula is percentage of interest, which is why the division by $100$ is there. The $r$ in the second formula is the decimal interest, so $4\%$ should be entered as $0.04$. Then the second formula gives $104$ as well.