This lesson shows how to create variables in PowerShell using the $ symbol. The $ tells PowerShell that what follows is a variable name. We assign a value to the variable using =. For example, $name = "Alice" creates a variable named name with the value Alice. Later, we can use $name to get the value stored. The script outputs Alice when we write Write-Output $name. Without the $, PowerShell treats the word as plain text and does not output the variable's value. This is why $ is important to access variables. The execution table shows each step: creating the variable, outputting it, and ending the script. The variable tracker shows how $name changes from undefined to "Alice" and stays that way. Remember, always use $ before variable names in PowerShell.