Both start with a particular frequency of radio waves. Then they encode the information (music, voice, etc) into it.
AM (Amplitude Modulation) encodes the information by changing the intensity (amplitude) of the radio signal. So it will stay the same frequency, just get more or less intense (think of a sound that gets louder and softer).
FM (Frequency Modulation) encodes the information by changing the base frequency a little bit. (think of a sound that gets slightly higher and lower).
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