Help figuring out the capacity of my iPhone 4?

I went to Settings --> About. It says Capacity: 13.7 GB ; Available: 7.2 GB.
I'm confused, do I have a 8 GB or a 16 GB?

You have a 16 GB. You have a 2.3GB for pre-loaded apps then 13.7GB is user-available, from that user-available you already used 6.5GB(13.7GB-7.2GB=6.5GB)

Your phone orginally had 16 GB but the phone itself takes up data for example the contact book takes up apace abd so on.