Range can be found by measuring the angular height of the target in millirads using the graticules on the periscope. In Silent Hunter V the observation periscope has these graticules in mrads and they are indicated as such. For the attack persicope the graticule that reads 10 is actually 100 mrads, something you have to be aware of. To calculate the range in kilometers you simply devide the mastheight by the angular height.
This calculation can easily be done with the slide rule. For example you observe a large steamer and measure an angular height of 19 mrads. Find the mastheight (26.2) on the D scale and put the hairline over it. See photo. Now find the angular height on the D scale and point the 1 on the C scale here. (If you use the zoom function on the periscope you need to use the 4 on the C scale instead of the 1). The range can now be read on the C scale under the hairline (1380 meters).