This may seem a bit strange, but by default the Raspberry Pi only uses as much of the SD card as the operating system requires. This means that even though you might have used a large SD card, the operating system won't use it.

To fix this so that all the space on the SD card can be used, use up / down cursor keys to select the 'expand_rootfs' menu option and hit return.

Once you do that, there will be some screen flashing as a script is run and then you will see the following confirmation.

Press Return again to return to the main menu.