08-15-2003, 02:18 PM
Assalamalaikum!
This is a very valid and nice question by Evolution and some nice answers have also been given. I would just like to add that as most of us are aware that there are 2 kinds of interest; namely, Compound and Simple. The interest declared in Islam is the compound type of interest. That is simply due to the fact that at the time of the Holy Prophet(P.B.U.H) and even in modern times, poor people take loans on an agreed interest rate and if for any reason they miss 1 repayment or so, the interest is compounded beyond their means. This leaves them with 2 option, 1. either burden their forthcoming generations or, 2. increase their earnings by whatever way, legal or illegal, leading to a probability of social evil.
Coming to the part about the difference in the wordings, well some people would say that but in reality there is a vast difference.
1. Interest rate is a predetermined rate, which makes the return on investment a known phenomenon for both the parties.
2. When they talk about giving profits, it means sharing the amount, which is unknown and there is not a definate probablity that a certain (predetermined) amount will be paid to the investor, upto the day it is announced.
I hope that this will clear any confusions.
Regards
OSA
OSA
This is a very valid and nice question by Evolution and some nice answers have also been given. I would just like to add that as most of us are aware that there are 2 kinds of interest; namely, Compound and Simple. The interest declared in Islam is the compound type of interest. That is simply due to the fact that at the time of the Holy Prophet(P.B.U.H) and even in modern times, poor people take loans on an agreed interest rate and if for any reason they miss 1 repayment or so, the interest is compounded beyond their means. This leaves them with 2 option, 1. either burden their forthcoming generations or, 2. increase their earnings by whatever way, legal or illegal, leading to a probability of social evil.
Coming to the part about the difference in the wordings, well some people would say that but in reality there is a vast difference.
1. Interest rate is a predetermined rate, which makes the return on investment a known phenomenon for both the parties.
2. When they talk about giving profits, it means sharing the amount, which is unknown and there is not a definate probablity that a certain (predetermined) amount will be paid to the investor, upto the day it is announced.
I hope that this will clear any confusions.
Regards
OSA
OSA
