It is often helpful to draw auxiliary lines in a geometry problem. In particular, you should *always* draw any radius that will intersect a tangent to a circle. In this problem, let's draw radii to the tangent points that correspond roughly to where F and C are labeled in your diagram. The area we are looking for is that of a shape for which you won't necessarily have memorized a formula. That's okay though because we can reinterpret it as a square with a quarter circle cut out of it, both of which you probably know how to find the area of. The square has side length x1, which gives it an area of x1^2. The quarter circle has radius x1, which gives it an area of pi*x1^2 / 4 (using the formula for area of a circle but remembering to divide by 4 because we only have a quarter circle). Now the area we are looking for is x1^2 - pi*x1^2 / 4, and we just need to find an answer choice that is equivalent. If I'm interpreting your typography correctly, it appears that A does just what we're looking for.

A is the correct choice