Its state affects the function of the numeric keypad commonly located to the right of the main keyboard and is commonly displayed by an LED built into the keyboard.
The Num Lock key exists because earlier 84-key IBM PC keyboards did not have cursor control or arrows separate from the numeric keypad.
Most earlier computer keyboards had different number keys and cursor control keys; however, to reduce cost, IBM chose to combine the two in their early PC keyboards.
On some laptop computers, the Num Lock key is used to convert part of the main keyboard to act as a (slightly skewed) numeric keypad rather than letters.
[1] Since Apple keyboards never had a combination of arrow keys and numeric keypad (but some lacked arrow keys, function keys, and a numeric keypad altogether), Apple has keyboards with a separate numeric keypad but no functional Num Lock key.