Inflation is the rise in the cost of food and services in a economy(mainly due to the supply of cash). The rate of inflation is measured in consumer price index(CPI) and product price index(PPI). Over time,as the cost of goods and services increase, the value of a dollar is going to fall because a person won't be able to purchase as much with that dollar as he/she previously could.
The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate(APR). The assets borrowed could include, cash, consumers goods, large assets, such as a vehicle or building. Interest is essentially a rental, or leasing charge to the borrower, for the asset's use. In the case of a large asset, like a vehicle or building, the interest rate is sometimes known as the “lease rate”. There are to types of interest, compound interest and simple interest
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