Three-digit numbers contain a hundreds place, a tens place, and a ones place. The hundreds digit represents groups of one hundred. For example, 245 = 2 hundreds + 4 tens + 5 ones = 200 + 40 + 5.
You already know that a two-digit number like 37 means 3 tens and 7 ones — that is, 30 + 7. The tens place tells you how many groups of ten you have. Now we add one more place to the left: the hundreds place. Just as ten ones make one ten, ten tens make one hundred. The hundreds place tells you how many groups of one hundred you have.
Think of it like bundling. Start with single blocks (ones). Bundle 10 ones together and you get a tens rod. Bundle 10 tens rods together and you get a hundreds flat — a big square made of 100 small blocks. A number like 352 means you have 3 of those hundreds flats, 5 tens rods, and 2 single blocks. In expanded form: 300 + 50 + 2.
The position of each digit is what gives it its value — this is the big idea behind our base-ten number system. The digit 3 in 352 is worth 300, not 3. The same digit 3 in 38 is worth 30. The digit's value comes entirely from which place it sits in. This is why the system is so powerful: you only need the digits 0 through 9 to write any number, no matter how large, just by using different places.
A useful way to practice is to read three-digit numbers aloud using place value: "245 is two hundreds, four tens, five ones." Then try working backwards: "3 hundreds, 7 tens, 0 ones" must be 370 — the zero is a placeholder that holds the ones position empty so the 3 and 7 land in the correct places. Place value makes addition, subtraction, and comparison of three-digit numbers systematic, which is where these skills lead next.