What happens at the RI cash flow crossover (break-even) point?

• A. The date when on-demand costs exceed reserved costs.
• B. The moment the upfront payment has been recovered.
• C. The point at which ongoing costs are eliminated.
• D. The date on which the reservation costs you the same amount as if you had been using on-demand rates; no longer paying out of pocket, but will continue to pay ongoing costs; if you stop using, you will lose money.

Answer: (D)

Break-even for Reserved Instances happens when the total cost of running the workload on-demand equals the total cost of using the reservation (upfront payment plus the discounted hourly rate) over the same period. At this point, you’ve recovered the upfront investment through the savings on hourly charges, and from then on you’ll generally pay less than on-demand for the continued usage. If you stop using the reserved capacity, you’ve paid upfront for something you didn’t fully use, so you’d lose money overall.