Most good stories start with a fundamental list of ingredients: the initial situation, conflict, complication, climax, suspense, denouement, and conclusion. Great writers sometimes shake up the recipe and add some spice.
Initial Situation
Miranda debates writing the letter. Mom prepares for the $20,000 Pyramid.
The novel begins in medias res, a literary term from the Greek and Latin epic tradition that means we're already in the middle of the action on page one. Miranda has been receiving weirdo notes that have asked her to write a letter about all of the things that have happened to her over the past several months. Already our dilemma is set up: will Miranda write the letter or not? And if she does, to whom will she give it? Also, who wrote the notes in the first place? The next couple of hundred pages will be dedicated to helping Miranda solve these riddles.
We're also introduced to a parallel subplot in the novel, which is Mom's preparation for her appearance on the $20,000 Pyramid. We can see that Mom, like Miranda, will be answering questions throughout the novel, but a different kind, of course. She's practicing to answer questions on live television.
We know from the initial setup that this novel is all about questions, puzzles, and mysteries in their various forms.
Conflict
Sal is punched. Miranda makes new friends and starts receiving notes.
Miranda begins to tell us her story – the story she would tell in the letter if she ever does write it. The emotional layout of the novel is mapped for us here as Miranda narrates the end of her friendship with her former best friend, Sal. It's her separation from Sal (which started, according to her, when Sal got punched) that really drives the novel – it's the reason why she begins making new friends, for instance.
Miranda also starts receiving the cryptic, creepy notes around this time, though she doesn't know exactly what they mean. These notes cause Miranda to take a closer look at the world around her – and to actually sit down and untie knots, to think about things.
Complication
Miranda meets Marcus. Friendships get complicated. Miranda receives the proofs.
The relationships set up in the novel start to get kind of complicated at this point. Miranda meets Marcus (the guy who punched Sal) and realizes he's not a villain, but just a super-smart kid who doesn't seem to understand other people. The character of Marcus introduces and enriches the themes of time and time travel. Miranda also learns that Annemarie has epilepsy and that maybe Julia isn't as bad as she seems. Also, the Laughing Man seems not to be so much crazy, as a "crazy-shaped person" (34.3). The truths that Miranda had formerly held start unraveling.
The proofs predicted in the letter also start to appear, as the novel builds a sense of urgency surrounding the letters.
Climax
The Laughing Man saves Sal.
The climax of the novel comes when Sal is saved by the Laughing Man, who becomes a figure of supreme sacrifice. Miranda also has her first revelation in this portion of the novel (a climax in and of itself) when she finally figures out that the Laughing Man was the person sending the notes. Further, Miranda experiences a personal transformation when she decides to become a nicer person and befriends Alice Evans and calls a truce with Julia.
Suspense
Mom saves Marcus. Miranda unties knots.
In this section most of the main action has occurred, yet Miranda doesn't know what to make of it all. She spends lots of time trying to process everything that has happened – and what it all means (just as we the readers are). Plot-wise, Mom saves Marcus from the cops, which is nudging her closer to her lawyerly ambition.
Denouement
Sal and Miranda talk. Mom wins the $20,000 Pyramid. Miranda's veil is lifted.
You got questions? We got answers.
The novel's denouement finally gives us one of the answers we really, really want, and in explicit detail. Miranda and Sal have a heart-to-heart and we learn that the reason Sal didn't want to be friends with Miranda anymore isn't really all that mysterious after all – he just needed space, and time to grow.
Mom makes a successful appearance on her game show, and Miranda is able to see the truth about everything that has happened and how it all fits together. This all goes down in Chapter 50 and is the moment when Miranda finally sees the magic thread.
Conclusion
Mom gets law school applications. Miranda writes the letter.
The conflicts set up in the beginning of the novel are settled here. Miranda decides to finally write the letter and she, at long last, knows who to give it to. Mom has won the prize money, which will allow her to pursue law school and make a better life for herself and her daughter.