Hi Joey H.,
How fast the distance is changing between the ships is the speed between them.
Use vectors with vw equal to the velocity in the west direction, vn the velocity in the north direction, and vb the velocity between them.
vw = -15i (west in the negative x-direction)
vn = 17j (north in the positive y-direction)
vb = vn - vw = 15i + 17j (where vw + vb = vn)
The speed between them is the magnitude of |vb| = √(152 + 172) = 22.67 knots.
As you can see, you could have just used the speeds, as they form a right triangle, and just used the Pythagorean theorem.
The initial distance of 10 nautical miles would come into play if we were finding the distance between them. (dw = |vw|*t + 10 and dn = |vn|*t)
I hope this helps, Joe.