In theory your friend is right. .02 has only two digits to the right of the decimal place, which implies that the reading is in hundredths of an inch, so it could be expressed as two one hundredths of an inch. .020 has three digits to the right of the decimal place, which implies that the dimension is in thousandths of an inch---so would be expressed as twenty thousandths of an inch. As we all know, anything measured in thousandths is ten times more accurate than something which is measured in hundredths.---It gets kinda like fighting over how many angels can dance on the head of a pin---but---theoretically--your friend is correct.