Filling in the nominal values, the formula for volume gives you
... V = (π/3)(6 cm)²(7 cm) = 84π cm³ ≈ 263.8944 cm³
The volume is a linear function of height, so the uncertainty in volume is proportional to the uncertainty in height. That is, the volume uncertainty will be
... ±∆V = ±(0.02/7)×263.8944 cm³ = ±0.753984 cm³
The volume of the cone is about 263.89 ± 0.75 cm³.
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We choose to round the volume to 5 significant digits because that is the accuracy of our value of π. The error is then rounded to the same precision.