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The number of permutations of 5 letters chosen from the first 8 letters of the alphabet can be calculated by looking at the options available when each of the letters has to be chosen. It is assumed the order in which the the letter are chosen is important.
For the first letter there are 8 options, for the second there are 7 options, for the third there are 6 options, for the fourth there are 5 options and for the last there are 4 options.
This gives the total number of permutations as 8*7*6*5*4 = 6720
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