Showing the sequence converges to the square root
Solution 1:
As mentioned in the comments, we need to show that the sequence is monotonic and bounded.
First, we observe that $$ x_n-x_{n+1}=x_n-\frac12\Bigl(x_n+\frac a{x_n}\Bigr)=\frac1{2x_n}(x_n^2-a). $$ Secondly, we obtain that \begin{align*} x_n^2-a &=\frac14\Bigl(x_{n-1}+\frac a{x_{n-1}}\Bigr)^2-a\\ &=\frac{x_{n-1}^2}4-\frac a2+\frac{a^2}{4x_{n-1}^2}\\ &=\frac14\Bigl(x_{n-1}^2-2a+\frac{a^2}{x_{n-1}^2}\Bigr)\\ &=\frac{1}{4}\Bigl(x_{n-1}-\frac a{x_{n-1}}\Bigr)^2\\ &\ge0. \end{align*} Hence, $x_n\ge x_{n+1}$ and $x_n$ is bounded from below since $x_n^2\ge a$ for each $n\ge2$.
Monotonic and bounded sequence converges. Denote the limit of the sequence $x=\lim_{n\to\infty}x_n$. Then we have that $$ x=\frac12\Bigl(x+\frac ax\Bigr)\quad\iff\quad x=\sqrt a. $$
Solution 2:
That looks a lot like the well known method for computing square roots. It is derived by using Newton's on
$$ x^2 - a = 0 $$
$$ x_{n+1}=x_n-\frac{f(x_n)}{f'(x_n)} $$
$$=x_n-\frac{x_n^2-a}{2x_n}$$
$$=\frac{1}{2}\left(x_n+\frac{a}{x_n}\right) $$
If it converges it will converge to the $$ \sqrt{a} $$