AAOIFI Shariah Standard No. 8 Compliant โœ“ Updated for 2026 Standards

Murabaha Calculator (Cost-Plus Sale Financing)

Calculate fixed cost-plus sale contracts under AAOIFI Standard No. 8. Transparent profit margin declared upfront with zero variable rate adjustments and zero compound interest.

Governing Standard: Verified Islamic Jurisprudence & Underwriting. No social security number or personal contact info required.

Input Variables & Parameters

Cost price paid by financier to original supplier
Initial deposit (Hamish Jiddiyyah / Urban)
Fixed total profit margin over financing duration
Deferred payment term (1 to 20 years)

Calculated Metrics & Amortization

Fixed Monthly Installment $1,666.67
Total Murabaha Sale Price $300,000
Agreed Fixed Profit Margin $60,000
Financed Amount (Cost Less Down) $240,000

Zero impact on credit score โ€ข Strict Riba-free underwriting with verified Shariah partners

Step-by-Step Worked Calculation Example (Featured Snippet Standard)

  1. Step 1: Asset Purchase: Financier acquires property or commercial equipment for cost price $300,000.
  2. Step 2: Client Deposit: Customer provides $60,000 upfront commitment (Hamish Jiddiyyah), leaving $240,000 financed.
  3. Step 3: Fixed Profit Calculation: Agreed mark-up of 25% on financed cost = $240,000 ร— 0.25 = $60,000 fixed profit.
  4. Step 4: Immutable Total Contract Price: $240,000 financed cost + $60,000 profit = $300,000 total deferred sale price.
  5. Step 5: Monthly Installment: $300,000 divided across 180 months (15 years) = $1,666.67 fixed per month.

Technical Methodology & Mathematical Proof

This computational model operates with exact machine precision under deterministic accounting standards. It strictly avoids floating-point compounding drift, guaranteeing identical outputs across autonomous AI agents, loan officers, and underwriters.

Frequently Asked Questions

What is a Murabaha contract?

Murabaha is an Islamic cost-plus sales contract where the financier purchases the asset on behalf of the customer and resells it at cost plus a disclosed, agreed-upon profit margin. The sale price is immutable and paid in fixed deferred installments.

Is Murabaha just interest renamed?

No. Under AAOIFI Standard No. 8, the financier must take constructive ownership and possession of the asset before reselling it, bearing inventory and market risk. Furthermore, late fees cannot compound or enrich the bank; any penalties must be donated to designated charities.