The centroids for the two clusters are (0.5, 1) and (2, 3)
How to determine the centriods of the two inital clusters
From the question, we have the following parameters that can be used in our computation:
A(1,1) B(1,0) C (0,2) D(2,4) E(3,5)
Start by calculating the Euclidean distance using

Using point A as a reference, we have the following:
AA = √[(1 - 1)² + (0 - 0)²] = 0
AB = √[(1 - 1)² + (1 - 0)²] = 1
AC = √[(1 - 0)² + (1 - 2)²] = √2
AD = √[(1 - 2)² + (1 - 4)²] = √10
AE = √[(1 - 3)² + (1 - 5)²] = √20
Using point C as a reference, we have the following:
CA = √[(1 - 0)² + (1 - 2)²] = √2
CB = √[(0 - 1)² + (2 - 0)²] = √5
CC = √[(0 - 0)² + (2 - 2)²] = 0
CD = √[(0 - 2)² + (2 - 4)²] = √8
CE = √[(2 - 3)² + (4 - 5)²] = √2
Assigning each point to the cluster with the nearest centroid, we have
Cluster 1 (associated with A): B(1,0) and C(0,2)
Cluster 2 (associated with C): A(1,1) and E(3,5)
Next, we the new centroids based on the mean of the points in each cluster.
New centroid for Cluster 1 (A) = 1/2(1 + 0, 0 + 2)
A = (0.5, 1)
New centroid for Cluster 2 (C) = 1/2(1 + 3, 1 + 5)
C = (2, 3)
Hence, the centroids for the two clusters are (0.5, 1) and (2, 3)