An explanation of how we remember
One popular theory of how we remember was proposed by Richard Atkinson and Richard Shiffrin in 1968. It proposed that the human memory is divided into 3 main sections:
Information from our environment, such as visual images from the eyes and sound, smell, etc. enter the memory here. The information that enters here may only stay here until it 'decays' and is forgotten. But if you pay particular attention to a piece of information - for example, you're focusing on an object or listening to somebody speak - the information will be passed into the second 'part' of our memory...
Short-Term Memory (STM)
The short term memory deals with immediate situations, i.e. the environment we're in, and memories here may last for hours or days. If they're not rehearsed - thought about in a deeper way - then they will, like in the sensory memory, decay and be forgotten and the STM as we currently know it has a limited capacity. However, if you repeat information and think about it more deeply it may be passed into the third section of the Multi-Store model of memory - LTM...
How much information can the STM store and how long does it last?
The exact capacity of short term memory is unknown, but Miller proposed a 'magic number' of 7 +/- 2 'chucks' of information. For example, you might be able to store a phone number between 5 and 9 digits long depending on how good your STM is. This is one explanation why many US phone numbers are 7 digits long.
Long Term Memory (LTM)
The long term memory contains events and information that's most important in a person's life - memorable events, friends and associates' names, etc. Research by psychologist Barhick has indicated that the LTM has a potentially unlimited capacity and memories here can last for a person's entire life. Bahrick studied ex-schoolfriends, asking adults how many of their ex-school buddies they could name from old photographs, and found that ex-students could name around 90% of the people pictured upto as long as 34 years after leaving school.
Does the multi-store model add up?
Human minds are extremely complex, and with many ideas in psychology, the multi-store model of our memory has been accused of over-simplifying something which defies any basic explanation. However, case studies of brain damaged people have indicated that memory might consist of a number of 'sections' as proposed, because some sufferers experience problems solely with their short term memory, while old memories from before accidents remain intact. Likewise, a person involved in an accident may lose all their previous memories, but still be able to function as normal afterwards, indicating that their short term memories are fine.