A one-year CD has a rate of 5.0%. If I invest $2500, do I get $2500 + $125 at the end of the year, or...?

(This answer assumes the legal realms of the US and it's territories.)

The short answer:
Most rates are expressed as Annual Percentage Rates. That is, the rate stated applies to an entire year. If the rate were stated 5.0% monthly, then the Annual Percentage Rate would be 5.0% * 12 = 60%.

If I were to guess, I would say the rate you are referring to is an Annual Percentage Rate. If you invest $2,500 in a 1 year CD with an annual percentage rate of 5% you will earn $125 at the end of 1 year (assuming you maintain the $2,500 in the CD for the entire year).

The long answer...

It depends on the terms of the CD.

Before I get too involved, I want to quickly clarify Annual Percentage Rate. The Annual Percentage Rate (or often stated as "nominal rate") does not take into account any effects of compounding (discussed in more detail later in this answer). Therefore, it is not best to compare investment options by reviewing the Nominal or Annual Percentage Rate.

Banks are required to disclose Annual Percentage Yields which is not the same thing as the Annual Percentage Rate (and due to simplicity of comparison, banks are restricted to disclosing up to only 2 decimal places of the percentage form of the Annual Percentage Yield such as 5.12% instead of 5.125%). The annual percentage yield takes into account the net effect of the investment stated in annual returns. Stated differently, it takes the amount of money you would make on the investment in a year divided by the original investment. This makes it easy to compare different investment options because with the APY stated, you know exactly how much you will have at the end of the term assuming the investment is maintained for 1 year:

Annual Return = Investment * APY

If we assume the 5.0% stated in the question is the APY of the investment, the 1 year annual return will be:

$2,500 * 5.0% = $125

Let's assume the rate stated in the question is not the Annual Percentage Yield (APY), but rather, it is the Annual Percentage Rate. We would need to figure out how the effects of compounding affect the investment to make a good decision.

There are a number of variables that go into the calculation but for the sake of simplicity I will reduce it to the most common:

Term, Rate (or Annual Percentage Rate) and Compounding Frequency. The Term and Rate have been discussed to some detail so I will jump to Compounding Frequency.

Compounding is the ability for interest earned on an investment to earn interest in a subsequent period. For example, assume we have a 1 year CD with an APR of 5.0% that compounds monthly:

In month 1 my earnings would be:

$2,500 * 5%/12 = $10.41

In month 2, my total investment value has increased by the $10.41 I earned in the first month so my earnings would be:

$2,510.41 * 5%/12 = $10.46

Notice that in month 2 my earnings were $0.05 higher than month 1. The 5 cents extra in earning was because of the $10.41 cents earned in month 1. Month 3 will increase yet again:

$2,520.87 * 5%/12 = 10.50

This trend will continue until the terms change or the investment matures.

Since interest is earning more interest, my total return after 1 year is greater than the Investment * Rate.

How much more?

If the 5.0% is the annual percentage rate and the investment uses compounding (interest earned in previous periods is eligible to earn interest), a one-year $2,500 CD with a rate of 5% would yield the following giving different compounding frequencies:

Continuous: Investment * e^( r * t )
2,500 * 2.71^(0.05*1) = $2,628.177
** note: e is euler's constant (beyond this discussion)
Daily (assuming a 360/360 day year):
Investment * ( 1 + r * (360/360) / 360 ) ^ 360
2,500 * ( 1 + .05 * 360/360 / 360) ^ 360 = $2,628.168
Monthly: Investment * ( 1 + r/t )^t
2,500 * ( 1 + .05/12 )^12 = $2,627.904

As you can see, the more frequently compounding occurs, the greater the return on your investment. Most banks don't offer Continuous Compounding but Daily, Monthly and Quarterly are common. Obviously Daily Compounding is better as we've demonstrated here but the compounding frequency is factored into the APY so all you have to do is compare the APY's of your different invesment opportunities and choose the APY that will allow for the greatest possible return as long as the risk of the investments are similar (bank deposits are insured up to $100,000).