The bisection method is an iterative method used to find the root of a function within a given interval. The method uses the formula:
\[ x_3 = \frac{x_1 + x_2}{2} \]
We are given the function \( f(x) = x^2 - x - 4 \), with the first two approximations \( x_1 = 1 \) and \( x_2 = 2 \).
Step 1: We calculate the value of \( x_3 \) using the bisection method formula:
\[ x_3 = \frac{1 + 2}{2} = 1.5 \]
Thus, the third approximation \( x_3 \) is 1.5, which corresponds to option (D).