First off, the length of MN is 2√10, not 8. This is because using Pythagorean Theorem, you get that MN=√4+36=2√10, which is (3).
The midpoint of MN can be found by finding the average of the coordinates of M and N. Therefore, our first part to solving this question is to find the coordinates of M and N. M is (2,5) and N is (4,-1). Finding the average of the x-coordinates gives us 3. Finding the average of the y-coordinates gives us 2, Therefore, the midpoint of MN is (3,2), or answer choice (3).