Learn Spanish (Latin America): Mi determinación es firme, aunque el desafío es grande. - My determination is firm, even though the challenge is big.

Because the speaker is stating a known, experienced fact. The challenge is definitely big, and the speaker is acknowledging that reality. We use aunque with the indicative mood (like es) to declare facts, which translates well to "even though" in English.

How would the meaning change if the sentence used the subjunctive and said aunque el desafío sea grande?

Using the subjunctive sea changes the meaning to a hypothetical scenario: "even if the challenge is big." It could also be used if the fact that the challenge is big is already old news to the listener, shifting the spotlight entirely to the speaker's firm determination.

Can I use reto instead of desafío for the word "challenge"?

Yes, reto and desafío are both very common in Latin America and are mostly interchangeable. Desafío can sometimes sound a little more formal or intense, which perfectly matches the serious, dramatic tone of having a determinación firme.

I remember that "big" or "great" is sometimes gran. Why is it grande here?