My Documents and Setting folder occupies 8.42 GB, but When I check the files inside individually it just shows 800 MB. Why is that?
Almost unbelieveable that you 7.6 gb unaccounted for. I could see being off by a bit due to rounding off or hidden files.
First i would check my math, if correct you could try WinDirStat -it's an awesome little tool that doesn't need to be installed with a very nice GUI that may help you find something you missed.
Also, empty your recycle bin - i don't think that will account for the difference but it might. In your tags you have temporary files listed -if you believe that may be your problem i can recommend CCleaner. Would suggest the standard virus/malware scans also.
Can you see all the system and hidden files? These could be taking up some of the space, but 90% seems a bit excessive.
Go to Tools > Folder Options > View > Advanced Settings.
You might be able to see more.
You could also install something like Treesize which should reveal more information.