How is data, such as text saved in an MS Word file, stored in a computer?

Data in a computer, including text saved in an MS Word file, is ultimately stored as a combination of 1s and 0s, which is the fundamental language of computers. This binary system underlies all digital data because computers operate based on binary logic. Each character in the text is encoded using a specific binary code, typically through standards like ASCII or UTF-8, which map characters to unique binary sequences.

For example, the letter 'A' might be represented as 01000001 in binary, allowing the computer to interpret and manipulate text. When you save a document, the computer converts all the typed text into this binary format, enabling it to store, retrieve, and display the information accurately when needed.

The other choices do not correctly represent how text data is fundamentally stored in a computer. Physical documents refer to tangible paper files, images would pertain to graphical data rather than text, and while a combination of letters describes the content, it does not reflect the underlying binary storage mechanism. Thus, the correct understanding centers on the binary representation of data.