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What is difference between "For instance" and "For example"?
Can I use both to exemplify a situation ?

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These are mostly interchangeable - but according to my gut feeling, "for instance" is for describing a hypothetical situation, and "for example" is for giving examples. You can use either without being too off. For instance, you could give an example of something material, and then you would say, "I need some English flash cards in a nice, durable material, for example, laminated cardboard".

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