Using the digits of 1345678, there are 210 three digit numbers in which no digit is repeated.
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210
24
321 312 213 231 123 132 6 3 digit numbers.
There are 5 numbers which can make the 3 digit numbers in this example. Therefore each digit in the 3 digit number has 5 choices of which number can be placed there. Therefore number of 3 digit numbers = 5 x 5 x 5 = 125
3 digit numbers are lessthan 4 digit numbers