What is the RI cash flow break-even point?

• A. The time when the overall on-demand costs finally exceed the reserved costs.
• B. The date on which the reservation has cost you the same amount as if you had been using on-demand rates; also known as the crossover point; you stop paying out of pocket, but ongoing costs continue; if you stop using, you will lose money.
• C. The moment the upfront payment has been fully recovered in cash flow terms.
• D. The moment the reservation maintenance is avoided.

Answer: (B)

RI cash flow break-even is the date when the total money spent on the Reserved Instance equals the amount you would have spent at on-demand rates for the same usage. This crossover point marks when the reservation begins to save you money compared with continuing to pay on-demand pricing. After this point, ongoing RI costs are offset by the savings from not paying on-demand rates, so you realize net savings as long as you keep using the reserved capacity. If you stop using the reserved capacity, you’ve paid for something you aren’t fully using, and you’d lose money.