Why does interest in money exist?

Question

What is it for and why? I found a lot of questions on interest rate but not what interest itself is

Thanks in advance 🙂

Edit: Thank you for all the replies i am now a financial god of wisdom, i’m not going to reply to unless something is unclear to me but comments will all be read

In: 9

Answer 1

Money loses value with time. 10 000$ today could be worth 9 000$ in 10 years (it’ll still be 10 000$ but what you can buy with it would be worth 9 000$ today). So since money loses value, you have to add an amount to a loan to compensate for it so that the lender doesn’t lose money or even earn money lending it to you.

Interest rate is that amount needed so that the lender won’t lose money / earn some.