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If you have already met More Adventures with Modular Arithmetic then you will have learnt that if A \equiv a \text{ mod } n and B \equiv b \text{ mod } n then AB \equiv ab \text{ mod } n.
This means that since 23 \equiv 2 \text{ mod } 7 we have 23^2 \equiv 2^2 \text{ mod }7 and so 23^2 \equiv 4 \text{ mod }7.