First Step. Create the Loopback file
dd if=/dev/zero of=/apps/test/loop db=1024 count=30720
This will create a 30 Mb file.
Second Step. Create a Loopback device.
First of all we will type
losetup -a
to list the current used devices.
losetup /dev/loop0 /apps/test/loop
Third Step. Create and mount a device.
mkfs -t ext3 -m 1 -v /dev/loop0
mkdir /virt_drive
mount /dev/loop0 /virt_drive