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Permutation (order matters): P(n,r) = n! / (n−r)!. Combination (order doesn't matter): C(n,r) = n! / (r!(n−r)!). Example: from 10 people, choose a president and VP = P(10,2) = 90; choose a 2-person committee = C(10,2) = 45. Pascal's Triangle rows give combinations. Used in probability, lottery odds, and algorithm complexity analysis.
P(n,r) = 720
C(n,r) = 120