Ultimately

 “Ultimately, then, all of life is a test. However, there are times that G-d puts an individual through an especially difficult test (nisayon). In such a case, a person is placed in a situation where his devotion and faith are tested.

G-d does not put a person to a difficult test unless He knows that the person will pass it. It is thus written, ‘G_d tests the righteous, but His spirit hates the wicked’ (Psalms 11:5). It is taught, ‘The potter does not tap vessels that are easily broken, but only vessels that are strong. G_d similarly does not test the wicked but the righteous’ (Bereshit Rabbah 32:3).
Since G-d is omniscient, He has no need to test people to see what they will do. When He tests a person, it is to bring out his latent potential and allow him to express it in action (Kuzari 5:20).
G-d therefore sometimes tests a person in order to reward him. This is because there is no reward for potential alone, as it is written, ‘Your work shall be rewarded’ (2 Chronicles 15:7). A test may also make a task more difficult so as to increase its reward.
Moreover, a test is often needed to make a person’s potential and ability known to himself so as to increase his self-confidence. In some cases, G-d also tests a person in order to make his good qualities known to others. It is for this reason that G-d often tests a person before choosing him for greatness or leadership.
Although G-d might guide or test man, the final choice between good and evil ultimately rests with the individual. Whether a person does right or wrong, it is totally up to him. Every normal person can always control his action, if he only tries hard enough. Man was created to be master of his fate, and as such, he bears the responsibility for it.”

Aryeh Kaplan’s “The Handbook of Jewish Thought