In salutation in a formal letter, we write:

The correct answer is Option (3) → Sir/Madam

The salutation is the greeting written just above the body of a letter. A formal letter is addressed to an official or an organisation, often to a person the writer does not know, so it uses a respectful, impersonal salutation: Sir/Madam (or Dear Sir/Madam).
Example: The letter to the Principal began with the salutation "Respected Sir/Madam".

Why the Other Options are Incorrect?

Option 1: My dear — Incorrect. "My dear ..." is a warm, personal greeting used in an informal letter to family or close friends.

Option 2: Dear friend — Incorrect. It addresses a friend, so it belongs to an informal letter.

Option 4: Mr./Mrs. — Incorrect. These are titles written before a person's name; on their own they do not form a salutation.