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File Compression means compressing the file to reduce the overall size of the file stored on the hard disk. Many types of algorithms and utilities are available that perform compression. Compression is carried out by mathematical functions. You can uncompress the file to its original contents.
Compressing a file helps you put more data in storage devices like floppy and ZIP drives which have very less disk space. If you want to send a file through the internet and the bandwidth is less then you can compress the file and send it as it takes less time to send the file.
You can use utilities like Win zip to compress and uncompress the files.
