In short: interest is the price paid for using someone else's money — what a borrower pays a lender, or a bank pays a saver, for the time the money is with the other party.
Simply put: when you borrow, you pay interest; when you save in a bank, you receive it. It is expressed as a percentage per year. With simple interest the percentage is applied only to the starting amount; with compound interest it is added to the amount and earns interest itself.
Example: €1,000 at 5 % simple annual interest for 3 years earns €150 — €1,150 in total. If the same €1,000 is a loan, €150 is the price you pay for it.
Watch out: interest is not the whole price of a loan. Fees and insurance come on top — so when borrowing, compare the APR and the total amount to repay.
Source: Pecuvo Modules 7 and 22; Directive 2008/48/EC, Article 3(j) (definition of the borrowing rate) — https://eur-lex.europa.eu/eli/dir/2008/48/oj