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Ijara Sol

The document provides calculations for Ijarah agreements, including fixed and variable rent scenarios for leasing machinery and vehicles. It details annual and monthly rent calculations, total payments over lease periods, and ownership transfer costs. Examples include a 5-year machine lease, a 3-year car lease, and a commercial property lease with rent increases.

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Muhammad Fahad
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3 views2 pages

Ijara Sol

The document provides calculations for Ijarah agreements, including fixed and variable rent scenarios for leasing machinery and vehicles. It details annual and monthly rent calculations, total payments over lease periods, and ownership transfer costs. Examples include a 5-year machine lease, a 3-year car lease, and a commercial property lease with rent increases.

Uploaded by

Muhammad Fahad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ijara

Fixed Ijarah Rent

Question:
A company leases a machine under an Ijarah agreement for 5 years. The cost of the machine
is $60,000, and the agreed profit rate is 8% per annum.

 Calculate the annual rent.


 What is the total amount the lessee will pay over the lease period?

Solution:

 Annual Rent = Cost of Asset×(Profit Rate)\text{Cost of Asset} \times (\text{Profit


Rate})Cost of Asset×(Profit Rate)
=60,000×8%=60,000×0.08=4,800= 60,000 \times 8\% = 60,000 \times 0.08 =
4,800=60,000×8%=60,000×0.08=4,800.
 Total Rent Paid = 4,800×5=24,0004,800 \times 5 = 24,0004,800×5=24,000

Monthly Rent Calculation

Question:
A car is leased under Ijarah for a period of 3 years. The car's purchase price is $40,000, and
the lessor charges a 12% profit rate per annum.

 Calculate the monthly rent.


 Determine the total payments made by the lessee after 3 years.

Solution:

 Annual Rent = 40,000×12%=40,000×0.12=4,80040,000 \times 12\% = 40,000 \times


0.12 = 4,80040,000×12%=40,000×0.12=4,800.
 Monthly Rent = 4,80012=400\frac{4,800}{12} = 400124,800=400.
 Total Payments = 4,800×3=14,4004,800 \times 3 = 14,4004,800×3=14,400.

Variable Rent Calculation

Question:
A commercial property is leased under Ijarah. The initial cost of the property is $100,000.

 For the first year, the rent is set at $10,000 annually.


 For the second and third years, the rent increases by 5% annually.
 Calculate the rent for each year and the total rent paid over 3 years.

Solution:

 Rent for Year 1 = $10,000.


 Rent for Year 2 = 10,000×1.05=10,50010,000 \times 1.05 =
10,50010,000×1.05=10,500.
 Rent for Year 3 = 10,500×1.05=11,02510,500 \times 1.05 =
11,02510,500×1.05=11,025.
 Total Rent = 10,000+10,500+11,025=31,52510,000 + 10,500 + 11,025 =
31,52510,000+10,500+11,025=31,525.

Ownership Transfer

Question:
A bank leases equipment to a client for $200,000 with an Ijarah agreement that ends in
ownership.

 The lessee pays $25,000 annually for 8 years.


 At the end of the lease, the client can buy the equipment for $10,000.
 Calculate the total cost of ownership for the lessee.

Solution:

 Total Rent Paid = 25,000×8=200,00025,000 \times 8 = 200,00025,000×8=200,000.


 Purchase Option = $10,000.
 Total Cost = 200,000+10,000=210,000200,000 + 10,000 =
210,000200,000+10,000=210,000.

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