Final answer:
The actual real interest rate is -5%.
Step-by-step explanation:
The real interest rate can be calculated by subtracting the inflation rate from the nominal interest rate.
In this case, the nominal interest rate is 2.5 percent and the inflation rate is 7.5 percent. So, to find the real interest rate, we subtract the inflation rate from the nominal interest rate: 2.5% - 7.5% = -5%.
This means that the actual real interest rate is -5%.
A negative real interest rate indicates that the purchasing power of money is decreasing, as the inflation rate is higher than the nominal interest rate.
In summary, the actual real interest rate is -5%.