The problem is under-specified both in terms of requirements and any implementation restrictions.

Given the lack of difficulty of the other questions (and this being pre-internet, targeted for an intern), I don't think the interviewer can have been expecting too much sophistication.

The other obvious way do do it, only requiring the same minimal realization that this is about triangles (with radius as hypotenuse) is to use r^2 = x^2 + y^2 and iterate x=0..r deriving y. You could do it without sqrt if they stipulated that.