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In certain cases there is no difference at all. It depends a great deal on the context in which the word is being and to what use the object is put.

For instance there is musical instrument, used as a tool to produce music. Though many people would not consider a violin a tool.

By the same token very few people would consider a garden spade an instrument

The definitions given in dictionaries emphasise these point more fully.

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Q: What is the difference between a tool and an instrument?
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