"차는 방에 있습니다."
Translation:The tea is in the room.
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Both are fine. I would mark this as an issue so they put the additional translation in. But if you wanna be super technical, whenever starting a sentence with a subject not previously mentioned or in comparison to the previous conversation, it's more typical to use 은/는. That being said, it REALLY doesn't matter here ^^
Yes, 에 represents location. Use 에 for anything that exists or will exist 'at' a location.
저는 공원에 있습니다
I am at the park
저는 공원에 갑니다
I am going to the park
Use 에서 for any action that takes place at a location or is 'from' a location
저는 미국에서 사는 HuntingHawk입니다
I am HuntingHawk and I live in America
저 고양이가 길에서 와서 길고양이라고요
That cat came from the street, so it is called an alley cat
That's because 있다 is quite a versatile word in comparison to English's many interpretations.
First, the most important thing to note is 있다 simply means "to exist." It means this and nothing else. From here, it'll start to make more sense:
Let's take this sentence: 저는 강아지 두마리 있다
This would translate as "I have two dogs." But the literal translation would be "As for me, two dogs exist." Utilizing a subject in this sentence implies possession of whatever "exists," and in English we say it a little differently, using "to have (something)."
Next let's take this sentence: 저는 병원에 있다
This one translates as "I'm at a hospital." And once again the literal translation is a bit different; "I exist at a hospital." The key player here is the ~에 at the end of 병원 which is designated as the "location particle," usually translated as "in" or "at." In English, we also have a slightly different way to express existence in/at a location: "to be (somewhere)."
I hope this brief explanation helps. Once you learn there's only one technical meaning to the word 있다 is only "to exist," many parts of the language start to make a lot more sense where it comes into play.