Islamic finance is based on the principles of Islamic law in providing financial services. One of the most important principles is the prohibition of usury (interest), which Islam considers unlawful as it is viewed as exploitation. Islam considers usury as one of the gravest prohibitions.

In addition, Islamic finance also prohibits Gharar (uncertainty), Maisir (gambling), and excessive risk. It emphasizes achieving economic and social justice by directing investments towards sectors that benefit society as a whole.

Islamic finance instruments include sukuk (bonds), Islamic banks that operate on profit-and-loss sharing principles instead of paying interest, and Islamic mortgage financing based on the principle of Murabaha (cost-plus financing) instead of traditional mortgage securities, among other mechanisms that align with Islamic law principles.

Assets can be defined as anything of value owned by a company or individuals, including anything that represents the rights and possessions of the company. In other words, they are the economic resources or all tangible or intangible assets owned by the company that can be converted into cash.

Simple interest and compound interest are two methods of calculating interest on loans or investments, and the main difference between them relates to how interest is calculated and accumulated over time.

1-Simple Interest : Simple interest is calculated at a fixed rate on the principal amount (the borrowed or invested amount). Interest is not calculated on interest earned in previous periods. Simple Interest = (Principal Amount) × (Interest Rate) × (Number of Periods).

2-Compound Interest : Compound interest is calculated at a variable rate on the original principal amount and the interest earned during each period. Interest accumulates over time, with interest being calculated on the original principal amount plus previously earned interest.

Compound Interest = (Principal Amount) × [(1 + Interest Rate) × Number of Periods] - Principal Amount.

In short, with simple interest, interest is calculated only on the original principal amount, while with compound interest, interest accumulates over time, so interest is calculated on both the original principal amount and the previously earned interest.