# The time value of money in Islam

Q:  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.

الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب

A: If all of the profit earned is unlawful then you are entitled to only the initial numerical amount invested in to what you have described as the ‘interest profit scheme’, which is 850,000 rupees (PKR). Any profit made above this amount must be returned to the original owner or his heirs and if that is not possible, then it must be donated to charity without any intention of reward. Islam does not recognise the time value for money and so the fact that the PKR currency has fallen in value due inflation does not allow one to recover the original value invested. One can only recover the numerical that was initially invested. Anything above that will be considered riba and thus be unlawful (haram) and sinful. For further reading on time value for money you may refer to our paper on student loans which discusses this: http://alqalam.org.uk/research-papers/islamic-viewpoint-on-student-loans/