When you purchase a reserved instance, you are committing to pay a certain amount now, and a certain hourly price each hour for the next year. Very important: the hourly price will be paid regardless of whether a matching EC2 instance is running or not.
Here's the breakdown of the
(assuming 8,760 hours per year)
Option 1: Full upfront
You will pay $5,022.00 now, and $0.00 each hour for the next 12 months.
Total after 12 months: $5,022.00
Option 2: Partial upfront
You will pay $2,562.00 now, and $0.292 each hour for the next 12 months.
Total after 12 months: $2,562.00 + $0.292 x 8,760 = $5,119.92
Option 3: No upfront
You will be $0.00 now, and $0.684 each hour for the next 12 months.
Total after 12 months: $0.00 + $0.684 x 8,760 = $5,991.84
Option 4: Only use OnDemand
Instead of buying a reserved instance, you could simply pay the OnDemand price for your instance.
The OnDemand price for a
p2.xlarge instance in us-east-1 is $0.90 per hour. If you are planning on using 1,500 hours, then your cost would be $0.90 x 1,500 = $1,350.00.
None of this will be paid up-front. All will be paid month-to-month as it is used.
Your best bet it to not purchase a reserved instance, and instead just use the OnDemand pricing.
Sometimes, OnDemand is cheaper compared to reserved instances. That is, as long as you turn off the instance :)
You could save more using spot instances, but the pricing for that fluxuates, and the instances cannot be terminated.