Islamic Formula of Future Value of Asset

  • Imran Haider Naqvi Center of Islamic Finance, COMSATS Institute of Information Technology, Lahore
  • Zainab Naveed Center of Islamic Finance, COMSATS Institute of Information Technology, Lahore
Keywords: Future Value of Asset, Islam

Abstract

Increasing price of an asset being sold on credit is a common practice of Islamic Financial Institutions (IFIs) and certain retailers using formulas of compound interest (Riba) and speculation (Maysir). As Islam prohibits both these both concepts, relevant literature was qualitatively probed to find Shariah compliant mechanism for setting future value of an asset being sold on credit negating Riba and Maysir. The study thus extracted a formula from authentic Shariah sources and presented it quantitatively as an alternate to abandon the conventional formulas of interest and speculation. It further contributed recommendations for credit sellers and buyers in the light of Shariah principles and possible future research.

Author Biographies

Imran Haider Naqvi, Center of Islamic Finance, COMSATS Institute of Information Technology, Lahore
Associate Professor and Head of Islamic Finance
Zainab Naveed, Center of Islamic Finance, COMSATS Institute of Information Technology, Lahore
Assistant Professor

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Published
2015-12-26
How to Cite
Naqvi, I., & Naveed, Z. (2015). Islamic Formula of Future Value of Asset. European Journal of Islamic Finance, (3). https://doi.org/10.13135/2421-2172/1075