We want to find how many ways there are to make a letter sequence out of three different letters. Note that in this case, the order is important, meaning each possible arrangement is a permutation. To calculate the number of potential sequences, we will use the formula for permutations of n objects taken r at a time.
_n P_r = n!/(n-r)!
We have twenty six letters in the alphabet and are taking three at a time. This means that n is 26 and r is 3. Let's substitute 26 for n and 3 for r in the formula above.