What exactly is contained inside an Amazon Machine Image?

An AMI contains the OS, preinstalled software, launch permissions, and block‑device mappings needed to create an EC2 instance.

What's the formatting type used to save your private key?

.pem format

What is a Security Group in AWS?

A Security Group in AWS is a virtual firewall for your Amazon EC2 instances.

If I turn off my local laptop, does the work I'm doing over RDP stop, or does the EC2 server keep running in the cloud?

What's the formatting type used to save your private key?