Digital information is stored as a string of 0’s and 1’s. Each number is referred to as a bit. The more bits we have the more different arrangements there are of the 0’s and 1’s.
We need to be able to calculate the number of different arrangements a given number if bits will give us and how many bits will be required to cover a given number of arrangements.
http://en.m.wikibooks.org/wiki/A-level_Physics_(Advancing_Physics)/Digital_Storage
http://www.colorado.edu/physics/phys1230/phys1230_fa12/DigiColor.pdf
You don’t need to use logarithms for the questions that will be set. Here is some extra support on how they work: http://www.mathsisfun.com/algebra/logarithms.html
Remember there are 8 bits in a byte and the prefixes are slightly different to normal.