Interest

I = The interest during the end of the second year to the end of the third year = 714 - 672 = 42

As the rate remains constant, so the rate of interest during the second and the third year.

P = the amount at the end of the second year = 672

t = 1 year (from the end of the second year to the start of the third year.)

Using the simple interest formula: I = Prt   the compound and simple interest is the same for one compounding period (1 year)

r = $\genfrac{}{}{1px}{}{\mathrm{I}}{\mathrm{Pt}}$

r = $\genfrac{}{}{1px}{}{42}{\mathrm{672\; \times \; 1}}$ × 100 = 6.25%