1. Client A wants to purchase a house for which he does not have adequate funds. He then approaches a financier B (Islamic Bank) who agrees to participate in purchasing a designated house amounting to BD 100,000/- (2-bedroom house with garden & garage) in Ishbiliya Village. The client pays a total of 20% of the price & financier pays 80%. B owns 80% of the house and A owns 20%.

a. During the first year A uses the house for residential purposes and pays rent to B which then reduces his share to 80% and A increases to 20%.(10 marks)

b. Second year, the process of Musharaka continues until such time ownership increases to 100% and Bs share becomes zero (0). (10 marks)