Its around $400, but you could use it for basic function with either an even lower end graphics card, or using the integrated graphics on the motherboard since I doubt your grandpa does any gaming? It will run Windows 7 easily. If you need nay help just ask
Here is a great Grandpa machine for $519, including shipping. Features include a triple core cpu for future proofing, integrated HDMI on the motherboard so he can hook his pc up to the new tv that you get him next year, and a 500 GB hard drive so he can store all those family pictures:
Note that this build is very similar to Bloodymoth's. The graphics are a bit less, hard drive is better. His does not include the Windows Operating System, and not sure if shipping is considered in the $400 price.