Perfect rounded edges in Adobe Photoshop (cont.)

First thing we need to do is create a new layer. This is done by clicking on the new layer icon as show below.

Now go to the new layer you just created by selecting it.

Next thing we need to do is create a rectangle using the rectangular marquee tool.

Then fill it with any color you choose. I picked black for this tutorial. Fill it using the paint bucket tool.

You should have something that looks like this now:

Next, zoom in on one corner of your rectangle ( I picked the upper left ) and while holding down the shift key create a circle using the elliptical marquee tool on the same layer as the rectangle ( layer 1 ). Be sure that the top and left of the circle touch the top and left edges of the rectangle respectively, as seen below. Obviously if your starting in another corner your circle will be touching in different areas.

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