Step 1: Simplify the given expression.
The given complex number is:
\[
\frac{1 + 7i}{(2 - i)^2}
\]
First, simplify the denominator \( (2 - i)^2 \). Using the formula \( (a - b)^2 = a^2 - 2ab + b^2 \), we get:
\[
(2 - i)^2 = 2^2 - 2(2)(i) + i^2 = 4 - 4i - 1 = 3 - 4i
\]
So, the given expression becomes:
\[
\frac{1 + 7i}{3 - 4i}
\]
Step 2: Multiply by the conjugate of the denominator.
To simplify the fraction, multiply both the numerator and the denominator by the conjugate of the denominator, \( 3 + 4i \):
\[
\frac{1 + 7i}{3 - 4i} \times \frac{3 + 4i}{3 + 4i} = \frac{(1 + 7i)(3 + 4i)}{(3 - 4i)(3 + 4i)}
\]
Step 3: Simplify the denominator.
The denominator is a difference of squares:
\[
(3 - 4i)(3 + 4i) = 3^2 - (4i)^2 = 9 - (-16) = 9 + 16 = 25
\]
Step 4: Simplify the numerator.
Now expand the numerator:
\[
(1 + 7i)(3 + 4i) = 1(3) + 1(4i) + 7i(3) + 7i(4i)
= 3 + 4i + 21i + 28i^2
\]
Since \( i^2 = -1 \), we get:
\[
3 + 4i + 21i - 28 = -25 + 25i
\]
Step 5: Final expression.
Now, the complex number is:
\[
\frac{-25 + 25i}{25} = -1 + i
\]
Step 6: Plot on the complex plane.
The complex number \( -1 + i \) is in the second quadrant, where the real part is negative and the imaginary part is positive.
Step 7: Conclusion.
Therefore, the complex number lies in Quadrant 2, and the correct answer is option (D).