My intention is to better understand what constitutes riba. Please note that some of these questions are far-fetched hypotheticals constructed only for insight. Again, I do not want to come across as having bad intentions. I only want to understand the details better.
- Is there a limit to profitability when selling an item? For example, is it permissable to sell my iPhone to a consenting buyer for twice the market price (if both parties agree)?
- Is it permissible to have agreed upon sequential transactions? For example, is it permissible if I tell my friend "I'll buy your iPhone if you buy my TV"?
- If the answer to both statements above is that they are permissible, is it also permissible for person A to sell person B a cheap item X for $1000 for full price if person A agrees to buy from person B another cheap item Y for $2000 paid over 3 months? If items X and Y are cheap (or worthless), then it is as if person B lended person A $1000 and is expecting person B to pay back as $2000 over 3 months. Is this permissible or is it riba?
- If the answer to to #2 is not permissible, do Islamic banks make house shoppers sign a contract binding them to purchasing the house after the bank buys it? If not, what would happen if someone told an Islamic bank that they want to buy the house, and after the bank purchases it, the person changes their mind?
- If the exchange rate between two assets is similar across long periods of time e.g. gold & silver, or a mutual fund for a different mutual fund, is it permissible to exchange gold worth $1000 paid in full for silver that is worth $2000 but that is returned over a 3 month period? Is this riba?
