buys a geometrically increasing annuity that will make payments of X at the end of the first year, X*(1.1) at the end of the second year and X*(1.1)^n-1 at the end of the n^th year. There will be a total of 20 payments. The annual effective interest rate is 5%. The price that Bob pays for the annuity is Y.

Immediately after the fifth payment, Bob decides to sell the annuity and uses the money from the sale to buy a $2000 par value 15-year bond with semi-annual coupons at a 10% coupon rate. Bobs annual effective yield rate will be 12%.

Find Y!