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Permutations are used when we need to arrange things in a specific order. For example, lets assume there are 10 people and we have to assign them medals. So order is important here as 1st person gets gold while 2nd gets silver. In this case, we use permutations.

Combinations are used when we need to make groups where order doesn't matter. For example, if we need to give 3 tin cans to 8 people, order doesn't matter here for the way we pick people. In this case, we use combinations.

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