It's possible to compute $\sqrt{a}$, $a>0$, using only addition and division and to compute $1/b$, $b>0$ through addition and multiplication by solving the equations
i) $x^2-a=0$
ii) $\frac{1}{x}-b=0$
using Newton's method. Write down the iteration formulas. What is a good starting value $x_0?$
The iteration formula is $$x_{k+1}=x_k-\frac{f(x_k)}{f'(x_k)}, \quad k=1,2,\ldots$$
How do I a choose a good starting value in the case of $f(x)=x^2-a$?
You can just use $a$ as a starting value. Newton's algorithm works fine from there. A few iterations, and you will be right on track to finding the square root of $a$.
If you want a "smart" starting valuse, then you can use the fact that square roots basically halve the number of digits. So write $a$ on the form $x\cdot 100^n$, where $1\leq x<100$ and $n$ is an integer. Then you can have as a starting value anything close to $\sqrt x\cdot 10^n$. For instance, $\lfloor\sqrt x\rfloor\cdot10^n$. This can of course be done in any base, like binary, in place of base ten if you so wish.
Picking a good initial value can be important. For instance, the fast inverse square root was invented to quickly get a good initial value for the function $f(x) = \frac1{\sqrt x}$. It exploited the fact that this was to be done on a computer, on numbers stored as 32-bit floating points, to exploit the exact way comnputers store and interpret numbers in order to get a final result about four times quicker than previous methods (directly computing the square root and inverting it). It consists of basically what I've done here: halving (and flipping the sign of) the exponent, and get an approximation to $1/\sqrt x$ (which they did by subtracting a magic number).