Three persons entering a railway carriage where there are 5 vacant seats. In how many ways can they seat themselves?

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In the question, three persons entering a railway carriage where there are $5$ vacant
seats. In how many ways can they seat themselves?

Why are we multiplying $5\times 4\times 3$? Ive read the fundamental principle of counting but still I cant apply much of it in this question.

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Choose one person: they have 5 places in which they can sit.

Choose the second person: they have 4 places. Likewise, the third person has three places.

Thus, $5 \times 4 \times 3$ possible arrangements.