What is interest and why is it Haram?

In business after selling a commodity if you earn (to receive as return for effort and especially for work done or services rendered) some more money is called profit and it is valid and allowed in Islam. But if someone has lent money to someone else with this condition that when ever he will return it he has to give him more than the capital money what he has received. Now this happens some times people fixed extra money payable monthly of six monthly or at the time of returning that money this we call profit (Reba) and it is not allowed and haram to take such money.