Identify the type of sentence: I don't understand why there is a fee.

Exclamatory

Declarative

Interrogative

Imperative

I don't understand why there is a fee is a declarative sentence. The sentence states that there is something that is not understood.

For the sentence to be exclamatory it needs an exclamation mark at the end:

I don't understand why there is a fee is a declarative sentence!

For this sentence to be interrogative, it needs a question mark at the end and an auxiliary before the main verb: Do you understand why there is a fee?

Finally, to be imperative, it needs the imperative structure that requires no subject:

Don't understand why there is a fee is a declarative sentence! This last is really not a probable option in normal speech.

It is a Declarative Sentence. Option B is the correct answer.

A declarative sentence is a sentence that just as its name suggests, declares or states any thing, and ends with a period.

In this sentence the person is stating that he doesn't understand why there is a fee. In this sentence, he is declaring something. He is stating that he is unaware of something. He is telling this by a statement, that I don't understand why there is a fee. So this is truly a Declarative Sentence