Final answer:
The estimated digit in the diameter of a penny measured to be 1.95 cm is '5', representing the hundredths place, which shows the closest estimation possible with the measuring instrument.
Step-by-step explanation:
When measurements are taken, the last digit is often the one that is estimated because it falls between markings on a measuring device. In the case of measuring the diameter of a penny, which is given as 1.95 cm, it is the hundredths place that is estimated. This means that the digit in the hundredths place, which is 5, represents the estimation. Presumably, the person measuring judged the penny to be halfway between 1.9 cm and 2.0 cm, hence they reported it as 1.95 cm. As this measurement is close to a tenth of a millimeter and the precision of the instrument or method used dictates how precise the measurement can be, it's common practice to estimate to this level of detail.