Islamic Finance Math: Murabaha, Ijara, Musharaka & Sukuk

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Price a murabaha sale of a packaging machine for Noor Trading Co., split it into 24 instalments and compare its implied annual rate with a conventional loan.
• Set the quarterly rental for a van the bank leases to Noor Trading Co., build the 12-quarter schedule and work out who carries the loss when the van comes back worth less.
• Model a 10-year diminishing musharaka for a family home: the bank's falling ownership share, the rent on that share and the yearly payments in a stacked column chart.
• Split the results of four mudaraba ventures between capital provider and manager, including a loss, and compare it with a musharaka partnership.
• Work out the cash flows of a 5-year sukuk certificate, its current yield and its annualised return to maturity with RATE, and the price that would give you a target return.
• Run one year of a small takaful fund for six businesses: the operator's wakala fee, the underwriting surplus and each participant's share of it.
• Work out Noor Trading Co.'s zakatable assets, deduct the short-term liabilities, check the nisab and calculate the zakat at the commonly used rate of 2.5 %.
• Put a bank loan, a murabaha, an ijara and a second loan on the same footing: implied rate with RATE, effective annual cost with EFFECT, and a bar chart that ranks them.