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Well.............if we're going for simplicity and functionality......this would be the best way.

1. Create a new layer. Fill with white, set opacity to 40% to 50%. Go to LAYER > CREATE CLIPPING MASK (or hold option/alt key and maneuver your cursor between the two layers you want to clip, the cursor will change then click).

2. Choose your text tool and type a letter. Position and size doesn't matter (this can be changed at any time).

 Double click this layer which opens the layer styles. Under ADVANCE BLENDING, set your fill to 0 (zero) and in the KNOCKOUT flyout menu choose SHALLOW, click OK.

Go to LAYER > CREATE CLIPPING MASK (or hold option/alt key and  maneuver your cursor between the two layers you want to clip, the cursor  will change then click).

Done.

I you want to move the letter..............choose your Move Tool, highlight the text layer and move.

If you want to change the letter's size...........hit Cmd/Cntrl + T or you can double click the letters thumbnail in it's layer and make changes using the Character panel.

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