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We demonstrate in this report an envelope detection technique with maximum likelihood estimation in a least square sense for determining displacement. This technique is achieved by sampling the amplitudes of quadrature signals resulted from a heterodyne interferometer so that the resolution of displacement measurement of the order of λ/10(4) is experimentally verified. A phase unwrapping procedure is also described and experimentally demonstrated and indicates that the unambiguity range of displacement can be measured beyond a single wavelength.

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