The concept used here is the place values. Each digit of a number holds it own value that is determined by its relative location within the number. Starting on the rightmost digit, the value increases by 10. The ones digit has a value of 1. The tens digit has a value of 10. The hundreds value has a value of 100.
The rightmost 4 has a value of 1, so its exact value is 4*1 = 4. The middle 4 is the tens place, so its exact value is 4*10 = 40. The third 4 from the right is in the hundreds place, so its exact value is 4*100 = 400.
