For a start, your answer variable should be of type char, not char*.
As for the if statement:
if (answer == ('Y' || 'y'))
This is first evaluating 'Y' || 'y' which, in Boolean logic (and for ASCII) is true since both of them are "true" (non-zero). In other words, you'd only get the if statement to fire if you'd somehow entered CTRLA (again, for ASCII, and where a true values equates to 1)*a.
You could use the more correct:
if ((answer == 'Y') || (answer == 'y'))
but you really should be using:
if (toupper(answer) == 'Y')
since that's the more portable way to achieve the same end.
*a You may be wondering why I'm putting in all sorts of conditionals for my statements. While the vast majority of C implementations use ASCII and certain known values, it's not necessarily mandated by the ISO standards. I know for a fact that at least one compiler still uses EBCDIC so I don't like making unwarranted assumptions.