Data is stored in computers in binary format using bits and bytes. The design cycle for developing programs includes problem analysis, data organization, algorithm design, coding, and testing. An example is provided of calculating the area and circumference of a circle given the radius. The steps are to specify the inputs and outputs, design the algorithm using the appropriate formulas, code the program, and test it by running it with different inputs and checking for errors. Errors can be syntax, logical, or run-time errors.