A Fiqhi Validation of the Legal Foundations of the Time Value of Money

Based on the theory of the time value of money, currency possesses a value that changes over time, and at any given moment, its value is affected by a discount rate in subsequent payments or receipts. This theory delineates the distinction between the present and future value of money and enjoys such widespread acceptance in economics and financial management that most proponents do not elaborate on their justifications for this theory in detail. Additionally, in economic and financial literature, these justifications are seldom presented in a standalone discussion. However, seven rationales can be posited to substantiate this theory. This article adopts a descriptive-analytical approach, utilizing library research to explore the seven potential justifications for the acceptance of the time value of money from an Islamic-jurisprudential perspective. The reasons and justifications for accepting this theory are fundamentally sound from this standpoint.