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To sum it up, enemies have two types of resistances: Armor and Magic resistance, corresponding to the two types of damage that there are: Physical and Magic damage.
Both Armor and Magic resistance are stats that the enemies have that reduce the incoming damage of the respective type (Armor reduces physical damage, and Magic resistance reduces Magic damage).
A tower with armor/magic penetration ignores a certain amount of the respective resistance when dealing damage. For example, if a tower with 20 magic penetration attacks an enemy with 50 magic resistance, the damage will be calculated as if the enemy only had 30 magic resistance.
The damage reduction formulas are set in a way in which 100 armor/magic resist makes the enemy receive 50% less damage from physical/magic damage respectively.
Or at least a guide post on this topic!