AWS pricing rests on three fundamentals: pay for compute, pay for storage, and pay for data transfer out (inbound is usually free; egress costs). Beyond that, EC2 purchase options trade commitment for discount:

• On-Demand — no commitment, highest rate; for spiky/unknown workloads
• Savings Plans / Reserved Instances — commit 1–3 years for big savings
• Spot — spare capacity at up to ~90% off, can be reclaimed; for fault-tolerant work
• Dedicated Hosts — physical isolation for licensing/compliance

Manage spend with Cost Explorer (analyze), Budgets (alerts), Cost and Usage Reports, and consolidated billing across an Organization.

Choosing an EC2 purchase option:
  Steady 24/7 web server     → Savings Plan / Reserved (big discount)
  Unpredictable dev/test     → On-Demand
  Batch render, can restart  → Spot (cheapest)
  Licensed software per core → Dedicated Host

1. Match a workload to each EC2 purchase option and justify it.
2. Explain why inbound data transfer is usually free but outbound is charged.
3. Set up (in words) a Budget alert at 80% of a monthly threshold.
4. Name two tools for analyzing where your AWS spend goes.

• ↗ AWS Pricing