Q: bluetooth hotspot not connecting to imac

I'm trying to get bluetooth Personal Hotspot working between my iphone 5 (ios 7) and imac (12,1)  (i5 mid 2011) Mavericks

When I turn on Personal Hotspot, the directions on the screen say "to connect using bluetooth": pair with computer.  when I try that, from iphone or from imac, it connects for about 2 seconds, then quits.  from the iphone, it usually says ".... imac is not compatible"

Any suggestions?