Why does the magician give Ah Fo three wishes?

Reason for the Magician Giving Ah Fo Three Wishes

The magician gives them to Ah Fo as a reward for rescuing the emperor.

We can actually infer here that the magician gives Ah Fo three wishes because: The magician is grateful that Ah Fo rescued him from the evil magician.

What is Inference?

Inference is actually known to be a conclusion that one makes after taking time to look at the available evidence and facts. Inference is used to draw conclusion after observation and experimentation.

We see that in the "The Three Brass Pennies", the magician gives Ah Fo three wishes because of his help. Ah Fo helped to rescue the magician from the evil magician.