Interest rate

Interest is the cost of borrowing money. The interest rate is the rate at which you’ll be charged for that money. Because you borrowed the money, they want to earn a bit of cash for loaning it to you, so they’ll charge you interest. That rate can be a fixed rate (let’s say 3% over the length of your loan) or a variable rate.
Example: If you take out a loan from a bank for $1,000 at a simple 3% interest rate and the length of the loan is one year, you’d owe them the $1,000 back at the end of the year plus $30 in interest.