Once upon a time, when hard disk space was scarce, file compression tools became popular. If you're as old as me then you might remember the ARC and ARJ formats, as well as the very popular Zip format devised by Phil Katz (hence PKZip).
Now that hard disk space is more plentiful, you might think that compression is no longer used. But that's not the case. Image formats such as JPG use compression by default. A modern Microsoft Office document is actually a ZIP file. To see it for yourself, rename a .docx file to .zip and you can see its contents.
File compression and extraction is also built into Windows nowadays. You can right-click a Zip file in Windows and extract it. And you can zip a file too - just right-click it and choose Send To, Compressed Folder.
But the built-in Windows compression tool sometimes can't cope with extracting large zip files. And it's slow. And doesn't handle other formats such as 7z, tar, and so on.
PeaZip is a really nice, free program for Windows that's a file manager with built in compression/decompression features. It handles loads of formats, and seems pretty powerful. Its main competitor is probably 7Zip, but I reckon that PeaZip looks nicer and is easier to use.
You'll find PeaZip at http://www.peazip.org/ and it's a 7 MB download. The site is rated as reputable by Web of Trust, and the software is malware-free according to VirusTotal.
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