IEEE single precision format can store approximately 7 decimal digits due to its 23-bit mantissa, which corresponds to a precision of about 1.19 x 10^-7 when considering the relationship 2^-23. This means that the smallest number that can be represented in this format is limited by the 23 bits available for the mantissa. Understanding this format is essential for grasping how decimal numbers are converted and stored in binary. The relationship between binary and decimal precision can be simplified by recognizing that 2^10 is roughly equal to 10^3, leading to the approximation that 2^23 is close to 10^7. Mastery of these concepts is crucial for effectively using IEEE single precision in computing.