Undecided Question

Should i cut her out of my life?

So i met my fathers great grandmother about 7 years ago but she is very offensives and has no respects for others or there feelings.My father introduced her to our live because he made a promise to his mother that he would take care of her.
I understand she is " set in her ways" and the chance that she changes is very little.
A couple of days ago i went over to help her do the laundry and clean a bit she said to me you know i love your hair( i have wavy brown hair and am light skinned but not as much as my sister)so much better then your frizzy haired bignosed sister(has curly brown hair and is very light skinned and nose to match her face) but its a shame your not as light skinned as her, while she was saying this i was just shocked i mean she has said many racist comments before and has been very belittling about the fact that my father married my mother a African women ad the fact that we speak our mother language and pretty much don't consider our self to be white at all.
But this remark/insult has pushed me to my limit and i snapped and called her old manipulative bitter racist woman and that she should just die because no one cares in which she said at least am not a mutt, now i didn't straight a way walked out i called my mother and she said do what you came for and respect your grandmother and apologise for insulting her and saying these things to her which i did i finished my chores and cooked her dinner didn't say a word in the process and waited till my train came went home.
I want to cut her out of my life but my dad says pleas just wait she will soon pass away and lets do what we can until then for her.My mother agrees with my father as she is brought up to love and care for your elders in there time of need.
What would you have done and is it better to cut her out of my life?