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What is the difference between Cap and Floor terms related to interest rate?

Project Finance Cash Flow Forecasting Financial Reporting Financial Systems Feasibility Studies
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Question added by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date Posted: 2015/06/02
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Abdul Majid Khatri
by Abdul Majid Khatri , A Qualified Chartered Accountant , Honeycomb Logistics Pvt. Ltd.

1) Cap Rate is upper limit of Interest rate while floor is lower limit of Interest rate.

2) Cap is Entered by Customer while floor is entered by Banker.

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

Max and Min interest rates.--------------

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