Let's say you upload a source file containing 200 words. You are in the process of translating it into 4 languages. The source language is considered as 1 language and the number of target languages is 4, hence the number of languages is 5.
The hosted words for the day will be 200 x 5 = 1000 (i.e. no. of words x no. of languages including the source language and target languages).
Your hosted words are calculated in this manner on a per-day basis. At the end of the month, the hosted words for each day are added up to estimate the hosted words for the month.
Note: Hosted words are calculated only for file-based and help-center integration projects.