Fin concept

Hello! Interest Interest is an essential element of every financial system and if we talk about interest what comes in mind is Compounding interest and Simple interest. Compounding interest offer interest on re-invested amount of interest. Compounding interest assume the re-invest the outstanding interest amount at the same rate. Theorem: "Effect of compounding over simple interest is much higher in long run because of exponential effect of time and rate difference" Power of compounding: What is Power of compounding? Power of Compounding means study of exponential growth of interest. There are two factor affect the exponential growth of interest 1. Time phase 2. Interest rate Time phase: Initially time has minor exponential effect on growth rate of interest element. But with passage of time interest compounding actually higher than simple interest as amount of interest portion in total outstanding amount increases at increasing rate. Lets understand wit...

Islamic Financial System - Part 2 Hello, Friends!! 1. Introductions In part 1 of the Islamic Finance, we were introduced to the history of Islamic Finance and Growth of Islamic Finance. Now Let's Move to one step further to take a glance of Financial operation of Islamic System. 2. Key Principles of Islamic Finance: The Principles governing an Islamic Financial system was derived from the Sharia (Legal Framework). Sharia jurisprudence doesn't differentiate the principles of religious life and another aspect of life. There are 3 Main principles the govern an Islamic Financial System: Principle of Ownership/Authority, Principle of Equity & The principle of Participation. Lets discussed in details each one: 2.1 Principle of Ownership: The principle of Ownership refer as Rule "Do not sell what you do not own"   and "Y ou can not dispossess of the properties except on the basis of right" . Hence unlike other financial system...

Islamic Finance - Foundation Part # 1 Hello Friends!!! Islamic Finance is the means by which Corporate including banks and Financial institutions raise the finance in Muslim worlds in accordance with the Muslim/Islamic Laws. Islamic Finance is new branch of Financial System evolving as a strong foundation in modern monitory system. Nowadays Islamic Financial System getting greater recognition. 1. Golden Era of Islamic Civilization - The Early Muslims engaged in the Transactions based on Sharia and Islamic Economic Principles are found in the middle ages from the mid-7th Century to mid-13th century. Islamic Civilization in the world is 24% of total population in the year 2015. 2. Foundation of Islamic Finance: Islamic Finance is Newly established system of Finance. First Islamic Bank firmed in the year 1963 in Egypt "Mit Ghamr Saving Bank". In the Year 1970 -Oil Boom Rapids the Economic growth of Islamic Financial System. In Dubai, First Islamic ...

Theory of Rationalization Classical economics stands on the radical assumption of rationalization. so let us introduce to the meaning and process of rationalization in economics. Rationalization Rationalization means in every situation/decision making, person use his logical / reasoning process which is observed in his behavioral patent. Rationalization means taking appropriate decision with the help of logical / reasoning process. Rationalization of consumer depends on following part Consumer taste and Preferences Consumer's experience in similar situation Consumer logical/reasoning process. Consumer's need / wants Role of rationalization in consumer behavior: Every consumer base theory in economics are based on rational behavior. Hence classical theory of consumer utility, demand, supply is stand valid if rationalization is is exist. Following theories are assume the rational consumer behavior: Consumer wants more satisfaction o...

The Theory of Wants 1. Definitions of Wants: Wants are unsatisfied willingness or needs of human to have something in life. Wants is willingness to buy or have something in life and which they may or may not capable of being satisfy out of available resources. So, an unsatisfied willingness or needs of person is wants in economics. 2. Function of wants: Wants is linear function of satiable wants and insatiable wants. Wants {W}= function {f} (Satiable Wants{SW} & Insatiable Wants {IsW}) W = f (SW + IsW) Out of balance available fund, how much needs you can satisfy that's know as satiable wants. balance unsatisfied wants are insatiable wants. 3. Magnitude of insatiable wants: It is an percentage of insatiable need to the function total wants. Magnitude of insatiable wants {Mi} = (Insatiable Wants / Total Wants {TW})*100  Mi = IsW/TW*100 If you required the 10 kg of wheat for better nutrition of your family bu...

1. Effect of injection of E-Money. People are now moving towards the digitization of business. To compete in the future business market we need to transact with business partner quickly and hence electronic money pays wider role in transaction. while moving towards the development, turbulence of e-money affect the way of doing business. This turbulence increase the movement of money faster and also create new threat of cyber crime in financial market. 2. E-Money with special characteristics: E-money in future may have special characteristics. a. Different denomination. b. One currency for globe. c. More secured. 3. Reduction of impurity of money: Injection of e-money reduce the money without owner. Impurity of money means Money without owner. centralization of money through financial channel reduce the % of impurity in money. % of Impurity of money = (Non-owner money/Total money in economy)*100 Hence, Money in future market will have much wider role in econo...