See this illustration:
What I would like to know is:
Check this:
private boolean isMarkerOutsideCircle(LatLng centerLatLng, LatLng draggedLatLng, double radius) {
float[] distances = new float[1];
Location.distanceBetween(centerLatLng.latitude,
centerLatLng.longitude,
draggedLatLng.latitude,
draggedLatLng.longitude, distances);
return radius < distances[0];
}