You draw a square. Then, you draw the largest possible circle, tangent to all four sides. If the lower left corner of the square is at (0,0), and the sides of the square are parallel to the coordinate axis, the point (2,1) is on the circle, within the square.
What is the radius of the circle?
Following the same road, I also got R=5 and R=1, but the latter value causes the point to be on a side of the square rather than within it, so R=5 is the only answer.