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Zach demonstrates how to save a Word document on a computer for school organization. Using the "Save As" option under the file menu, he creates a new folder named "school 2014" to store the document. By hitting "Ctrl S" or clicking on the disk icon, a save dialogue pops up, allowing for saving in the specified folder. Closing the document and reopening it shows that the saved file is still there in the designated folder. This process ensures proper organization and backups for school documents.