The chances of you going outside your 1k budget before you can take on investment or earn some revenue are basically zero.
$250 x 30 = $7500
because this cost is accumulative, within a year, the monthly bill will be as high as $75000. This is just the data storage. There are extra fees for database access, bandwidth ...
http://instagram-engineering.tumblr.com/post/13649370142/wha...
That was 7 months ago, so let's say 5TB today. Plugging that into the calculator for AWS says Instagram pays a whopping $500 for photo storage each month.
I don't want to take the time to do it myself but here http://highscalability.com/blog/2012/4/9/the-instagram-archi... someone punches (in the comments) all of their numbers into the AWS calculator. He comes up with 12k per month based on what they've said they're running.