Internal Fragmentation occurs when fixed sized memory blocks are allocated to the process without concerning about the size of the process. In this fragmentation the memory space is divided into blocks that are usually the size of powers of 2 such as 2, 4, 8, 16, 32, 64, . . . . . bytes.
Required memory for Program A = 20 KB, which is greater than 16 KB but less than 32 KB. So size allocate for Program A in RAM is 32 KB (25 KB). Same as allocate size in RAM for Program B is 64 KB (26 KB) and Program C is 16 KB (24 KB).
Program C matches the size of the partition, so there is no wastage in that partition,but Program A and Program B are smaller than the partition size. So in partition 1 and partition 2 there is remaining free space which is unusable (wastage). This is called Internal Fragmentation.
External fragmentation occurs when the processes are allocated memory dynamically.
Programs A, B and C of different sizes are loaded in memory (RAM) contiguously. After complete of Program A it is unloaded from memory. Now there are two free space areas in the memory, but they are not adjacent. The addition of this two free spaces is definitely enough for Program D, but due to the lack of adjacency that space is unusable for Program D. This is called External Fragmentation.
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