Does the BIOS encrypt the password?
If not, can it be found with physical access?
If yes, which algorithm does it use?
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yes, bios general have the password encrypted, but apparently it is also easily crackable. if you search for "bios password crack", you should be able to find methods or even programs that will crack your bios password, depending on what your bios is, as i think this website frowns upon actually posting details about cracking thing.
with physical access, it is also usually resettable (not recovering the password, but just reset it to factory settings, i.e., no password). this depends on the motherboard and newer ones will be harder.