Define the relationship

The interest earned in the second year is the compound interest on the amount at the end of the first year for one more year. If P is the principal, the amount after 1 year is $P(1 + R/100)$. The interest for the 2nd year is this amount multiplied by the rate.

$I_2 = P(1 + \frac{R}{100}) \times \frac{R}{100}$

Substitute given values

Substitute $I_2 = 3726$ and $R = 15$. The expression becomes $3726 = P(1 + 0.15) \times 0.15$.

$3726 = P(1.15)(0.15)$

Calculate the Principal

Simplify the equation: $3726 = P \times 0.1725$. Solving for $P$: $P = 3726 / 0.1725 = 21600$.

$P = \frac{3726}{0.1725} = 21600$