Final answer:
Sally's monthly payment amount for the dining set after a deferred payment plan and accruing interest at 25.48% cannot be exactly calculated unless the method of interest capitalization is given. The total amount owed after the deferment period must be determined first, and then divided by 24 to get the monthly payments over the two subsequent years.
Step-by-step explanation:
The student's question revolves around the calculation of monthly payments Sally must make to pay off a dining room set she purchased. Sally bought the set for $1,780 and used a 12-month deferred payment plan with an interest rate of 25.48%. She has to pay off the full amount within two years after the deferment period, without any payments made during the deferment period.
First, we need to calculate the total amount owed after the deferment period. The interest accrued during this period will be added to the principal amount of $1,780. After calculating the new total, we would use the formula for a fixed installment loan to find out the monthly payment over the two years following the deferment period. Unfortunately, without knowing how interest is capitalized during the deferment period (monthly, quarterly, annually, etc.), we cannot calculate the exact payment amount. We would also need the exact formula or method used to apply the interest to the principal during the deferment and payment periods.
If this information is provided and Sally's total debt after the deferment period is recalculated accounting for the addition of interest, dividing this new balance by 24 (the number of months in two years) would give us her monthly payment amount.