The customer and the
bank buy a house for £10 million, the bank contributing 80% of the price, by
paying £8 million, and the customer contributing 20% of the price, by paying £2
million; The price of the house is further sub-divided into 10 units where the
bank owns 8 units and the customer owns 2 units: Say that the total rent of the
house is £75,000 per month, in which case the rent of one unit is £7500 per
month. The bank gives its 8 units on Ijara (lease) to the customer for £60,000
per month.
1. Based on the rental
value and the financing period, determine the monthly repayment schedule that
results in the client fully owning the property at the end of the agreed rental
term.
2. Detail any
assumptions you have made to undertake these calculations.
