They tell you what level of precision you can expect from measurements that are made using that instrument.
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Estimated
The degree of accuracy of the measuring instrument.
estimated
There are two significant figures in 0.025.
The greater the number of significant figures, the greater the precision. Each significant figure increases the precision by a factor of ten. For example pi = 3.14 is accurate to 3 significant figures, while pi = 3.14159 with 6 significant figures is a more accurate representation.