How long will Logan take to pay off the equipment according to the refinancing plan?

In a refinancing plan, the duration for paying off equipment typically depends on the terms of the loan, including the interest rate, payment amounts, and overall loan structure. In this scenario, the correct answer indicating that Logan will take 5 years to pay off the equipment suggests that this specific term was either stipulated in the refinancing agreement or calculated based on the total amount owed and the payment schedule.

Opting for a 5-year term is common because it allows for manageable monthly payments while ensuring that the total interest paid over the life of the loan remains reasonable. This timeframe often strikes a balance between affordability and minimizing interest costs compared to longer repayment periods, which can accrue more total interest.

Understanding these dynamics is crucial when evaluating any financing option, as it highlights the significance of loan duration in the overall financial planning process for micro enterprises. In practical terms, paying off the equipment in 5 years allows Logan to align his cash flow with business growth while systematically reducing debt.