It determines how much that digit is worth. See this article on place value. http://www.aaamath.com/plc.htm
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It is in the thousands' place.
For this kind of problems, go from left to right, and use the smallest possible digit for each position.
The value of a digit depends on its position as well as its face value.
The value of a digit in a number is the face value of the digit multiplied by its place value. In the decimal system, the value of the digit immediately to the left of the decimal point is units so that its numeric value is the face value of that digit. The place value of any other digits is ten times the place value of the digit to its right - or one tenth of the digit to its left.In the binary system, the place value goes up in multiples of 2, in the octal system in powers of 8 and in hexadecimal in 16s. There are also number systems based on other bases.
Standard numeral is a number written where each digit has a place value according to its position in relation to other digits. It means stating a number in number form.