Calculation Problems

1. Latifa purchased an apartment using the diminishing Musharaka method of financing from Egypt Islamic Bank. The value of the apartment is (Egyptian pound) EGP500,000. Egypt Islamic Bank requires 20% deposit. The repayment period is 10 years. The market rental value for the apartment is estimated at EGP30,000 per year. Repayment is annual.
   • How much will Latifa have to deposit for the purchase of the apartment?
   • How much will Egypt Islamic Bank finance?
   • Complete the table below for the diminishing Musharaka. Year 1 is completed.

Year	Rent payment to bank	Annual repayment of purchase price to bank	Total payment to bank	Bank ownership (%)	Latifa ownership (%)
Start of contract	none	none	none	80	20
1	24000	40000	64000	72	28
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