Lets take an example and describe this in batter and easy way:
If you have a table have some values in column A and B:

So when we copy the formula =Sum(A4:A7) from Cell A8 to B8 then its automatically update its reference such that =Sum(B4:B7) as in above image. These cell reference are called Relative Cell Reference.
2. In the Formula bar highlight the cell reference for the cell, which is to be made absolute then press the F4 key from keyboard. $ signs are automatically placed in front of the column and row references.
For Example :

In above image table you can see that we want to Fix the A4 address. its means every number of column B is multiply by 25 which is A4. So A4 never change when we copy this formula in next cell C4 to C5 and so on.
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