The first digit can be any one of 10 (0 - 9). For each of those . . .
The second digit can be any one of 10 (0 - 9). For each of those . . .
The third digit can be any one of 10 (0 - 9).
So the total number of possibilities is (10 x 10 x 10) = 1,000 .
Another way to look at it:
If each digit in the password can be any digit, then the total number
of them is exactly how many counts you have when you count from
zero to the highest 3-digit number.
Counting from 000 to 999, you have 1,000 counts.