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Ervin Coulson demonstrates how to save a file in RTF rich text format. Word processing programs can save files in various formats like DLC, RTF, plain text, and PDF. RTF is accepted by most word processors such as Microsoft Word, WordPad, OpenOffice, and Notepad. It allows you to share documents with others using different word processors while preserving the format. To save a file in RTF, open the file, click on 'save as,' select 'rich text format' from the dropdown menu, and save the file with the desired title.