Well, the interest is $100, and the interest rate is 10% (but people often say "x% interest" without saying "rate").
And of course, Jim will have to pay back the original $1000 after one year, so this is what happens: Jim borrows $1000, but he has to pay back $1100. This is the idea of interest -- paying for the use of the money.
And this example is just an indeal, imaginary case, because it is just a simple full year loan, but the banks often want the loan paid back in monthly amounts, and they also charge extra fees too. Once I wanted to have this kind of one year loan but one of the managers over there explained it so -- I should start to pay them back soon (after a month, with monthly amounts; they're not going to wait me 12 months). And so, I refused it.