Anecdote: Way back when, in my first year at the University, we had a crash course in measurements and error estimates. The favorite story of the lecturer dealt with a new world record in javelin throw. The American Bud Held had thrown the javelin 263 feet 10 inches - and a journalist had converted that to metric measures (this was before the inch was standardized to 25.4mm) and come up with a result of 80.41754m.
His point was: A grain of sand is about 1mm in diameter or 0.001m. The mark left by a javelin when it lands (usually in a grass field) is at least 4inches long. Thus, 263 feet 10 inches indicates a measurement precision of about one inch - which is reasonable. Translated to metric it indicates a precision of about 2.5cm. So - the journalist
invented a precision that was not present in the original measurement.
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RaduAndrei said:
I measure some quantity with an instrument that it is precise to two decimal points.
So maybe I get 8.84 V. Then I do some changes in my parameters and get 0.01 V.
A digital instrument has a
resolution and a
precision. The usual digital multimeter has a precision of 3½ digits or about 1/1000 - which tells us something about the
analog part of the meter. The
resolution is the "step size" of the digital part of the meter. 1/1000 is the equivalent of 10 bits - and an analog-to-digital converter with 12 bit resolution is basic technology. Thus you can get a measurement with lots of figures, not all of which have any significance.
Anecdote: When digital thermometers first came out, they had a tendency to show the temperature with at least two decimals (as in 17.65°C). That represented the
resolution of the digital part of the thermometer. Just for fun I checked it against a calibrated mercury thermometer and got a calibrated reading of about 1°C higher. The
precision of the mercury thermometer was 0.25°C, so the
precision of the digital thermometer was about 1°C. The decimals given by the digital thermometer were useless. Decide for yourself whether or not they were
significant figures.