This is a simple question to solve. Let's first calculate all the arrangements for the first case to understand the logic:
As we can see above, once we have 8 letters, and we need to calculate the numbers of arrangements with 5 letters, for the first letter we have 8 possible letters, for the second letters we have 7 possible letters once one letter was used for the first one. For the third letter we have 6 possible letters, for the fourth, 5 possible letters and for the fifth, 4 possible letters. So, we just multiply 8*7*6*5*4 = 6720 possible arrangements.
For the second situation we can follow the same logic:
And finally for the third situation we have:
As we can see above, the third scenario has more arrangements.