Starting on September 1, 2000 - the day he starts college - and ending on September 1, 2004, Craig borrowed $4000 a year to pay for college expenses (i.e. that's 5 withdrawals total). After graduation, he decided to go to graduate school in mathematics, and his loans were deferred (i.e. they accrued interest, but no payments were due). After finishing graduate school, he began repaying his loans. Beginning on July 1, 2007, he made monthly payments for 12 years. Each payment increased by 1.3% over the previous payment. If his loans had a fixed nominal rate of 7.8% convertible monthly for the entire life of the loans, what was the size of his first payment? Answer = $