The digit * the value of its place in the number is the value that digit contributes to the overall number.
Example: 12345
The 3 is in the hundreds place, so the 3 contributes 3 * 100 = 300 to the overall value of 12345.
Another way to put it:
1 * 10000 = 10000
2 * 1000 = 2000
3 * 100 = 300
4 * 10 = 40
5 * 1 = 5
10000 + 2000 + 300 + 40 + 5 = 12345