Quick Answer
The answer is $180,000. This is correct because you first calculate the monthly cost savings by subtracting the projected AWS monthly cost of $35,000 from the current on-premises monthly cost of $50,000, which gives $15,000 per month. To find the annual AWS cost savings, you then multiply that monthly savings by 12 months, resulting in $180,000. On the AWS Certified Cloud Practitioner CLF-C02 exam, this question tests your ability to perform a basic total cost of ownership (TCO) comparison, a common scenario in the pricing and support domain. A frequent trap is stopping at the monthly savings or forgetting to annualize the figure, so always check whether the question asks for monthly or annual savings. Memory tip: think “monthly delta times twelve” — MDx12 — to quickly convert any monthly savings into an annual figure.
This CLF-C02 practice question tests your understanding of billing, pricing, and support. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company currently pays $50,000/month for on-premises infrastructure. They project that running the equivalent workload on AWS will cost $35,000/month including all data transfer. What is the annual AWS cost savings?
$15,000
Why wrong: $15,000 is the monthly savings — the question asks for annual savings.
$180,000
Monthly savings: $50,000 - $35,000 = $15,000. Annual savings: $15,000 × 12 months = $180,000.
$420,000
Why wrong: $420,000 is the annual AWS cost ($35,000 × 12) — not the savings compared to on-premises.
$600,000
Why wrong: $600,000 is the annual on-premises cost ($50,000 × 12) — not the savings.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
$180,000
The monthly cost savings are $50,000 - $35,000 = $15,000. Annualizing this gives $15,000 × 12 = $180,000. Option B is correct because it correctly multiplies the monthly savings by 12 to compute the annual savings.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
$15,000
Why it's wrong here
$15,000 is the monthly savings — the question asks for annual savings.
$180,000
Why this is correct
Monthly savings: $50,000 - $35,000 = $15,000. Annual savings: $15,000 × 12 months = $180,000.
Related concept
Read the scenario before looking for a memorised answer.
$420,000
Why it's wrong here
$420,000 is the annual AWS cost ($35,000 × 12) — not the savings compared to on-premises.
$600,000
Why it's wrong here
$600,000 is the annual on-premises cost ($50,000 × 12) — not the savings.
Common exam traps
The trap here is that candidates often confuse monthly savings with annual savings, or mistakenly calculate the annual cost of one environment instead of the difference, leading them to pick Option A, C, or D.
Detailed technical explanation
This question tests the fundamental concept of cost savings analysis in cloud migration. The monthly savings of $15,000 is derived from subtracting the projected AWS monthly cost ($35,000) from the current on-premises monthly cost ($50,000). Annualizing requires multiplying by 12 months, yielding $180,000. In real-world scenarios, AWS Cost Explorer and TCO calculators automate such comparisons, but candidates must understand the basic arithmetic to avoid common pitfalls.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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FAQ
Billing, Pricing, and Support — This question tests Billing, Pricing, and Support — Read the scenario before looking for a memorised answer..
The correct answer is: $180,000 — The monthly cost savings are $50,000 - $35,000 = $15,000. Annualizing this gives $15,000 × 12 = $180,000. Option B is correct because it correctly multiplies the monthly savings by 12 to compute the annual savings.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This CLF-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CLF-C02 exam.
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