Let's tackle the problem step by step, assuming it's related to calculating interest rates with inflation expectations.

Part 1: Expected Real Interest Rate on the Loan

To calculate the expected real interest rate, you can use the Fisher equation, which is:

$\text{Real Interest Rate} = \text{Nominal Interest Rate} - \text{Expected Inflation Rate}$

If you provide the nominal interest rate and expected inflation rate, I can calculate this for you. Let me know if you have those values!

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Part 2: Actual Real Interest Rate on the Loan

Here, you need to compute the actual real interest rate, which is:

$\text{Actual Real Interest Rate} = \text{Nominal Interest Rate} - \text{Actual Inflation Rate}$

In this case, you're given the actual inflation rate of 7%, but the nominal interest rate is still required for the calculation. Once you have that, we can determine the actual real interest rate.

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Part 3: Impact of Inflation on Borrower and Lender

a. If the inflation rate turns out to be higher than expected, this typically benefits the borrower and disadvantages the lender because the money paid back is worth less in real terms.

b. If the inflation rate turns out to be lower than expected, it benefits the lender and disadvantages the borrower because the money paid back retains more purchasing power than initially expected.

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Do you have any questions about the formulas? Feel free to ask for more details, and I can provide more specific calculations once I have the nominal interest rate.

Related Questions:

1. What is the Fisher equation, and how is it applied?
2. How do nominal and real interest rates differ?
3. How does inflation affect loan repayments for borrowers and lenders?
4. What happens when inflation is misestimated in an economy?
5. How can lenders protect themselves from unexpected inflation?

Tip: Always keep in mind that higher inflation than expected erodes the purchasing power of money, affecting both lenders and borrowers.