The time value of money in Islam

Fatawa Question

A father invested 850,000 rupees into an interest profit scheme in Pakistan in 1995 in one of his sons name. In 1995 the value of the rupees was strong. The rupees rate to the English pound was £ 1 = 55 rupees. Therefore 850,000 rupees was £ 15,454 in the year 1995. After 20 years, in 2015 the interest profit scheme has now given a total profit amount of 4,800,000 rupees. At this moment in time the value of the rupees to the pound is weak. It is about £ 1 = 158 rupees. As the father invested £ 15,454(850,000 rupees) at that time in 1995, I think it would make sense to remove that as the halal amount now in rupees. For example £ 15,454 × 158 = 2,441,732 rupees-(current rupees value to the pound of 2015.) or to use a stable economy like gold value then and now to calculate the actual amount invested that was Halal. I look forward to your advice.

Fatwa

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Publisher

al-Qalam Shariah Scholar Panel

Publication Date

2016-03-22

Country of Publication

United Kingdom

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Islamic economics
• Profits
• Money
• Time value of money

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-726145

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