AWS Billing, Pricing, and Cost Management — Questions and Answers
Question 1: Which AWS pricing model allows you to commit to a consistent amount of compute usage (measured in $/hour) for a 1- or 3-year term in exchange for a discount of up to 66% compared to On-Demand pricing?
- Savings Plans (Correct answer)
- Reserved Instances
- Spot Instances
- Dedicated Hosts
Correct answer: Savings Plans
Savings Plans offer flexible discounts (up to 66%) in exchange for a commitment to a consistent dollar-per-hour spend over 1 or 3 years. Unlike Reserved Instances, Savings Plans automatically apply to any eligible compute usage (EC2, Fargate, Lambda) regardless of instance family or region.
Question 2: A company wants to receive an alert when its monthly AWS bill exceeds $500. Which AWS service should they use?
- AWS Cost Explorer
- AWS Budgets (Correct answer)
- AWS Pricing Calculator
- AWS Trusted Advisor
Correct answer: AWS Budgets
AWS Budgets lets you set custom cost, usage, or reservation budgets and triggers SNS/email alerts when thresholds are breached. Cost Explorer is for analyzing historical spend, the Pricing Calculator estimates future costs, and Trusted Advisor provides general best-practice recommendations.
Question 3: Which EC2 purchasing option is most appropriate for a fault-tolerant, stateless batch processing workload that can be interrupted and resumed, where minimizing cost is the top priority?
- On-Demand Instances
- Reserved Instances
- Spot Instances (Correct answer)
- Dedicated Instances
Correct answer: Spot Instances
Spot Instances use spare EC2 capacity and can be up to 90% cheaper than On-Demand, but can be interrupted with a 2-minute warning. They are ideal for stateless, fault-tolerant workloads like batch jobs that can checkpoint and resume.
Question 4: What is the purpose of the AWS Free Tier's '12 months free' category?
- Services that are permanently free for all AWS customers regardless of account age
- Services free for the first 12 months following your initial AWS account sign-up date (Correct answer)
- Services free for 12 months only if you purchase a Support plan
- Services free for 12 months only in the us-east-1 region
Correct answer: Services free for the first 12 months following your initial AWS account sign-up date
'12 months free' services (e.g., 750 hours/month of t2.micro EC2, 5 GB of S3 Standard storage) are available at no charge for the first 12 months after you create your AWS account. After that period, standard pay-as-you-go rates apply.
Question 5: Which AWS tool provides an interactive, graphical interface to visualize, understand, and manage your AWS costs and usage over time, including forecasting future spend?
- AWS Budgets
- AWS Cost and Usage Report (CUR)
- AWS Cost Explorer (Correct answer)
- AWS Billing Dashboard
Correct answer: AWS Cost Explorer
AWS Cost Explorer is the purpose-built tool for exploring, filtering, and graphing historical cost and usage data. It also provides a 12-month forecast. The CUR provides raw granular billing data, Budgets sets alerts, and the Billing Dashboard is a high-level summary.
Question 6: A company uses multiple AWS accounts under AWS Organizations. Which feature allows the company to pool Reserved Instance discounts across all member accounts?
- Consolidated Billing (Correct answer)
- AWS Control Tower
- Service Control Policies (SCPs)
- AWS Resource Access Manager
Correct answer: Consolidated Billing
Consolidated Billing in AWS Organizations combines usage across all member accounts into a single bill. This allows Reserved Instance and Savings Plans discounts purchased by any account to be shared across the organization, and also qualifies the combined usage for volume pricing tiers.
AWS Billing, Pricing, and Cost Management
Which AWS pricing model allows you to commit to a consistent amount of compute usage (measured in $/hour) for a 1- or 3-year term in exchange for a discount of up to 66% compared to On-Demand pricing?