Inflation-indexed securities are bonds that promise you future money in today's dollars. For example, this year, company A sells a bond that promises to pay owners of the bond any amount of dollars in five year that has the same buying power as $100 does today. This is an example of a five-year inflation-indexed bond with face value $100.

Suppose that inflation between this year and the next 5 year is 2% overall. Suppose further that, that this year (the beginning date), people pay 94.7 dollars to buy the bond.

Calculate the percentage real rate of interest of the five-year inflation-indexed bond with face value $100 as described above.

Note: Do NOT use the information on inflation rate for your calculation (WHY?)