Data values are continuous with infinitely many values. Each has a finite number of possible values. Digital computers are far more popular than analog since they are more efficient and more general.
Computer memory is divided into many cells.
Modern computers have millions of bits of memory. To create data values other than 0 and 1, we combine bits using the binary number system. Compare with base 10, we have combinations. The right hand column is the ones value, then next is tens , then hundreds etc. The highest bit can't be stored, so the answer is 4.