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To replace text in an Excel cell, use the SUBSTITUTE function. For example, if we have the sentence "this is an amazing story and I love to hear this story," we can replace a specific instance of the word "story." By entering the formula =SUBSTITUTE(cell_reference, "story", "tale of wonder", 2), we indicate the text to look at (the cell), the old text to replace ("story"), the new text ("tale of wonder"), and specify the instance we wish to replace (the second occurrence of "story"). This transforms the sentence to "this is an amazing story and I love to hear this tale of wonder."