- A
Spot Instances
Why wrong: Spot Instances can provide up to 90% discount but are interruptible and not purchased as Reserved Instances with commitments.
- B
On-Demand Instances
Why wrong: On-Demand is the baseline pricing — no discount applies.
- C
Reserved Instances (All Upfront, 3-year)
All-upfront 3-year Reserved Instances provide the maximum discount — up to 72% — in exchange for the maximum commitment (payment and duration).
- D
Compute Savings Plans (1-year, No Upfront)
Why wrong: No-upfront Savings Plans provide a smaller discount than all-upfront Reserved Instances for the same commitment period.
Question 43 of 1,024
CLF-C02 Billing, Pricing, and Support Practice Question
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.
Which AWS pricing model provides the largest discount compared to On-Demand pricing in exchange for a 1 or 3-year commitment with full upfront payment?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Reserved Instances (All Upfront, 3-year)
Reserved Instances (All Upfront, 3-year) provide the largest discount compared to On-Demand pricing because the customer commits to a 1- or 3-year term and pays the entire amount upfront, which gives AWS predictable capacity planning and reduces billing overhead. This model can offer discounts of up to 72% off On-Demand rates, significantly more than partial upfront or no upfront options, and is the most cost-effective for steady-state workloads.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Spot Instances
Why it's wrong here
Spot Instances can provide up to 90% discount but are interruptible and not purchased as Reserved Instances with commitments.
- ✗
On-Demand Instances
Why it's wrong here
On-Demand is the baseline pricing — no discount applies.
- ✓
Reserved Instances (All Upfront, 3-year)
Why this is correct
All-upfront 3-year Reserved Instances provide the maximum discount — up to 72% — in exchange for the maximum commitment (payment and duration).
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Compute Savings Plans (1-year, No Upfront)
Why it's wrong here
No-upfront Savings Plans provide a smaller discount than all-upfront Reserved Instances for the same commitment period.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse the discount depth of Compute Savings Plans (which are flexible across instance families) with the maximum discount available, overlooking that the 3-year All Upfront Reserved Instance commitment provides the highest percentage discount due to the longest term and full upfront payment.
Detailed technical explanation
How to think about this question
Reserved Instances are a billing discount applied to a specific instance family in a specific region, not a physical instance; AWS applies the discount to the hourly usage of matching instances. The All Upfront payment option maximizes the discount because it reduces AWS's financial risk and administrative costs, with the 3-year term offering a higher discount than 1-year due to longer commitment. In real-world scenarios, enterprises running predictable, 24/7 workloads like databases or web servers often combine All Upfront 3-year Reserved Instances with Savings Plans to optimize costs across multiple instance families.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
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
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Billing, Pricing, and Support — study guide chapter
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FAQ
Questions learners often ask
What does this CLF-C02 question test?
Billing, Pricing, and Support — This question tests Billing, Pricing, and Support — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Reserved Instances (All Upfront, 3-year) — Reserved Instances (All Upfront, 3-year) provide the largest discount compared to On-Demand pricing because the customer commits to a 1- or 3-year term and pays the entire amount upfront, which gives AWS predictable capacity planning and reduces billing overhead. This model can offer discounts of up to 72% off On-Demand rates, significantly more than partial upfront or no upfront options, and is the most cost-effective for steady-state workloads.
What should I do if I get this CLF-C02 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
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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