I have just bought a 40.7GB hard drive. When the device was autodetected by my Bios it showed a capacity of 40.7GB, however, when I ran Fdisk I got only 39GB. After formatting, I was left with 38.1GB. Where has the rest of the space gone?
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You haven't 'lost' any space: it's just that the way hard disk manufacturers quote drive capacity is a bit misleading. Hard drive capacities are quoted as unformatted space. The argument is that a drive could be formatted for use by various operating systems, and the amount of usable space will be different depending on the formatting method.
Less easy to defend is the fact that manufacturers treat 1,000 bytes as a kilobyte, 1,000KB as a megabyte and 1,000MB as a gigabyte. Software uses factors of 1,024. If you take the 40,700,000,000 bytes on your hard disk and divide by 1,024 to convert this to software gigabytes, you'll arrive at the figure you got after formatting. You haven't lost any space: you just don't have as much as you thought. See also tip Can't access all my gigabytes
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