A Mathematics Model for Determinating the Value of Ijarah Contract

The contract of Ijarah ("providing services and goods temporarily for a wage" from Arabic) of Islamic Finance is an ownership of the right to the benefit of using an asset, or the usufruct, for a period of time. This contract is essentially of the same design as an instalment leasing agree...

Full description

Saved in:
Bibliographic Details
Published in:IOP conference series. Materials Science and Engineering 2018-01, Vol.288 (1), p.12111
Main Author: Sumarti, N
Format: Article
Language:English
Subjects:
Leases
Leasing
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The contract of Ijarah ("providing services and goods temporarily for a wage" from Arabic) of Islamic Finance is an ownership of the right to the benefit of using an asset, or the usufruct, for a period of time. This contract is essentially of the same design as an instalment leasing agreement, in which the owner rents or leases his/her property or goods to a lessee for a specified number of periods for a fee. This paper explains the mathematical formulation in the Ijarah contract, which is needed in the simulation of Ijarah based on the various values of the depreciated methods of assets. The formulae are implemented into some examples. The result of the mix Ijarah and other contracts in a housing credit scheme could reveal the real bank's margin, using some assumptions.
ISSN:1757-8981
1757-899X
DOI:10.1088/1757-899X/288/1/012111