The following sentence makes no sense.

"In the Decimal system (base 10), each digit in hexadecimal is equal to that digit multiplied by the exponent of 16 that is equal to its location minus one."

What you probably mean is:

"To convert a number from hexadecimal to decimal do the following:

1) Take the least significant bit. If it is 0 thru 9 leave it at that value. If it is A or above convert it to 10 thru 15 this will be the first item in a sum.

2) Take the 2nd significant bit do the above but multiply the value obtained by 16 add this to the sum

3) Take the 3rd significant bit and convert is as in 1 above then multiply it by 16^2. Add it to the sum

4) Repeat the above for more places. for each new place increment power of 16."

I am confused, for example let's take this 5F

1) I must take the least significant bit it will be 5 because it's less than F (15)

2) Second significant is F (15), and what is it "do the above"?? I didnt do any math at above.

3) 3rd significant is again F, then I must to multiply it? 15x32? (16^2)

Where did you take this from? ( 5 x 16) + ( 15 x 1 )