2.  Value of RM100 today is different from RM100 a year from today  In conventional economics this is acceptable due to the following reasons: ◦ Production opportunities ◦ Time preferences for consumption ◦ Risk ◦ Expected inflation 2

3.  TVM on money is not allowed due to riba injunctions  TVM on commodity is allowed. Hence there can be a different price for the same good if it is paid in cash or deferred  Reasons for allowing: ◦ Time preference ◦ Supply and demand (Fahim Khan) 3

4. ◦ Return from investment (ex-ante and ex-post) (Kahf) ◦ Opportunity cost for compensation (Misri) ◦ Promote trade ◦ Analogy between price increase and price reduction in early repayment ◦ Risk and effort  Reasons against ◦ Riba esp sales leading to riba ◦ Two sales in one ◦ Time cannot be valued. An increase in the amount of a loan to make up for deferment is no different from such an increase in sale, and both fall under riba. 4