Beginner Ruby question - what does the ${...} notation in String literals do?

Question

I'm reading some Ruby code and I don't understand this snippet:

thing = '${other-thing}/etc/'

It appears to substitute a value for the ${other-thing} and use that to build the String thing but I haven't been able to recreate this myself.

EDIT: Sorry to all, it turns out there was some preprocessing going on by Maven (a Java build tool). The accepted answer shows how one could do the substitution in straight Ruby.