Gemco has found an ore deposit that is very promising for development. Net income from the mine will be $200,000 at the end of each month. Gemco's initial equipment costs at the start are $4.2 million and the equipment will be salvaged at the end of the project for $100,000.

(a) Draw a cash flow diagram of this project.

(b) If the interest rate is 3% nominal annual compounded monthly find the duration of the project to break even. Use iteration to find the answer.