There are a lot of explanations doing the rounds; and a lot of them are part of the reason; but only part of it.

This is sometimes true and sometimes not: It depends on the type of disk, the manufacturer, and the age of the unit. You’ll find that firmware written to the disk in this way mainly occurs on some brands of external hard-drive. Even if there is firmware on the disk, though, that’s not the whole answer to the question.

File Allocation Table

The file allocation table is a part of the disk reserved by the disk’s file system, (Usually FAT32 or NTFS) when the disk is formatted.

In short the file allocation table keeps track of what data is stored where on the disk so that the integrated electronics can consult the listing to report the data’s location to the operating system should it be queried or to be able to almost instantly access the data when the operating system requires it – But again the file allocation table is only part of the story.

The Main Reason

The main reason is to do with the method used to measure the total number of bytes: The computer’s algorithms use binary (Base 2); while the manufacturers use denary (Base 10 or decimal). A basic unit for measuring the capacity of any storage device is the kilobyte: In the binary system used in the computer’s algorithms a kilobyte is 1000 bytes expressed as a power of 2; in this case 2 to the power of 10 or 1024 bytes.

Manufacturers, on the other hand, define a kilobyte as 1000 bytes expressed as a power of 10; in this case 10 to the power of 3 or 1000 bytes: Therefore a manufacturer correctly labels their disk as containing 100,000,000 kilobytes of 1000 bytes each, or 100 gigabytes; yet the computer reads it as 97.65625 gigabytes, or 97,625,250 kilobytes of 1024 bytes each.

So there we have it; by using different methods of counting based upon binary and denary respectively, the manufacturer and the computer both arrive at different answer; although both are technically correct.