Note: 1K=$2^{10}$

Initial set of holes (in KB):

Allocation of P1 (16 KB):

• Eligible holes $(\ge 16\text{ KB})$: $\{18, 20, 25\}$.

• Best-fit selects the smallest eligible hole: $18\text{ KB}$.

• Remaining hole size: $18 - 16 = 2\text{ KB}$.

• Updated list of holes: $\{20, 4, 25, 2, 7, 9, 15, 12\}$.

Allocation of P2 (9 KB):

• Eligible holes $(\ge 9\text{ KB})$: $\{9, 12, 15, 20, 25\}$.

• Best-fit selects the smallest eligible hole: $9\text{ KB}$.

• Remaining hole size: $9 - 9 = 0\text{ KB}$ (hole completely occupied and removed).

• Final list of holes: $\{20, 4, 25, 2, 7, 15, 12\}$.

Counting holes of size less than 8 KB:

• The holes of size $< 8\text{ KB}$ are: $4\text{ KB}$, $2\text{ KB}$, and $7\text{ KB}$.

• Total count = 3.