Team Assignment 1 Khaled wants to earn a living being an Uber driver, but he doesnt have a car. Uber has high standards and requires a fairly new car by Khaled cant afford it so he asks his friend Abdullah if he can loan him 70,000 Riyals so he can buy a car and earn a living and that he should be able to pay him back in 3 years from the income he plans on generating. Abdullah likes Khaled and has the money to spare but he studied the Fisher equation in his economics and finance classes that differentiates between inflation and real interest as follows: Nominal Interest = Real Interest + Expected Inflation So if the nominal interest rate is 5% and the real interest rate is 1% and expected inflation is 4%, Abdullah is wondering whether he should require Khaled to compensate him for the inflation rate of 4% so that his purchasing power remains the same when his loan is returned to him after 3 years. This way hes not charging interest; only inflation.

1. Abdullah is wondering whether the Islamic prohibition of Riba (usury) is not a crystal-clear concept and that maybe its based on a weak Hadith or that the definition of what is Riba is not mentioned in the Quran. He also wonders if it is just a minor sin and not a big deal like stealing or drinking alcohol. Does the Quran actually specify that any amount of interest in Haram? In other words: is usury and interest the same thing in Islam? Is this a big deal (is it a major sin or a minor sin) in Islam? Support your argument with (daleel) a Quranic verse and/or Prophetic hadith.