Semiannual Report - Financial Statements
T. Rowe Price
Tax-Exempt
Money Fund
August 31, 1997
Portfolio Highlights
SECTOR Diversification
Percent of Percent of
Net Assets Net Assets
2/28/97 8/31/97
______________________________________________________________
Hospital Revenue 27% 40%
General Obligation - Local 13 14
Educational Revenue 14 10
General Obligation - State 15 9
Prerefunded Bonds 6 8
Industrial and Pollution Control Revenue 6 4
Ground Transportation Revenue 1 3
Water and Sewer Revenue 2 3
Housing Finance Revenue - 3
Air and Sea Transportation Revenue - 2
Dedicated Tax Revenue 3 2
All Others 12 3
Other Assets Less Liabilities 1 - 1
_______________________________________________________________
Total 100% 100%
T. Rowe Price Tax-Exempt Money Fund
Unaudited
For a share outstanding throughout each period
Financial Highlights
6 Months Year
Ended Ended
8/31/972/28/97 2/29/96 2/28/95 2/28/94 2/28/93
NET ASSET VALUE
Beginning of
period $1.000 $1.000 $1.000 $1.000 $1.000 $ 1.000
Investment activities
Net invest-
ment
income 0.016 0.030 0.033 0.026 0.020 0.023
Distributions
Net investment
income (0.016)(0.030) (0.033) (0.026) (0.020) (0.023)
NET ASSET VALUE
End of
period $1.000 $1.000 $1.000 $1.000 $1.000 $ 1.000
_____________________________________________________
Ratios/Supplemental Data
Total return 1.61% 3.05% 3.38% 2.63% 2.05% 2.36%
Ratio of expenses
to average net
assets 0.53%! 0.55% 0.56% 0.58% 0.59% 0.60%
Ratio of net
investment
income to
average
net assets 3.18%! 3.00% 3.33% 2.59% 2.04% 2.35%
Net assets,
end of period
(in
thous-
ands) $709,626 $678,135 $679,143$687,022$732,900$695,699
! Annualized.
The accompanying notes are an integral part of these financial
statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited
August 31, 1997
Statement of Net Assets
Par Value
In thousands
ALABAMA 2.7%
Birmingham, GO
VRDN (Currently 3.35%) $ 8,750 $ 8,750
VRDN (Currently 3.40%) 180 180
Jefferson County, GO, VRDN
(Currently 3.40%) 10,000 10,000
Total Alabama (Cost $18,930) 18,930
ALASKA 0.5%
Alaska Housing Fin., 3.95%, 12/1/97 1,500 1,500
Valdez Marine Terminal, Mobil Alaska Pipeline
VRDN (Currently 3.30%) 2,000 2,000
Total Alaska (Cost $3,500) 3,500
ARIZONA 0.9%
Mesa, GO, 6.75%, 7/1/98 (AMBAC Insured) 1,300 1,331
Salt River Agricultural Improvement and
Power Dist. Electric
7.625%, 1/1/08
(Prerefunded 1/1/98!) 1,250 1,290
8.125%, 1/1/08 (Prerefunded
1/1/98!) 3,685 3,738
Total Arizona (Cost $6,359) 6,359
ARKANSAS 0.1%
Arkansas Dev. Fin. Auth., Sisters of Mercy
VRDN (Currently 3.30%) 1,000 1,000
Total Arkansas (Cost $1,000) 1,000
CALIFORNIA 1.1%
Northern California Power Agency
8.00%, 7/1/24 (Prerefunded 7/1/98!) 1,000 1,034
Oakland, COP, VRDN (Currently 3.30%) 4,700 4,700
Riverside County, GO, TRAN,
4.50%, 6/30/98 2,000 2,009
Total California (Cost $7,743) 7,743
COLORADO 2.0%
Colorado, GO, TRAN, 4.50%, 6/26/98 $ 1,000 $ 1,005
Colorado HFA
Kaiser Permanente
VRDN (Currently 3.25%) 1,900 1,900
VRDN (Currently 3.30%) 3,500 3,500
Sisters of Charity Health System
VRDN (Currently 3.35%) 5,300 5,300
Denver, IDR, W. W. Grainger,
VRDN (Currently 3.40%) 2,190 2,190
Total Colorado (Cost $13,895) 13,895
DELAWARE 0.3%
Delaware, GO, 5.00%, 5/1/98 2,375 2,392
Total Delaware (Cost $2,392) 2,392
DISTRICT OF COLUMBIA 1.6%
Dist. of Columbia, American
Univ., VRDN (Currently 3.30%) 11,630 11,630
Total District of Columbia (Cost $11,630)
11,630
FLORIDA 4.2%
Alachua County HFA, Shands Teaching Hosp.
VRDN (Currently 3.30%)
(MBIA Insured) 13,600 13,600
Dade County, Water and Sewer
VRDN (Currently 3.25%)
(FGIC Insured) 1,000 1,000
Hillsborough County IDA, PCR, Tampa Electric
VRDN (Currently 3.75%) 2,500 2,500
Jacksonville HFA
Baptist Medical Center
VRDN (Currently 3.85%)
(MBIA Insured) 100 100
Genesis Rehabilitation Hosp.
VRDN (Currently 3.75%) 9,800 9,800
Jacksonville Hosp. Auth., Methodist Hosp.
10.50%, 10/1/15 (Prerefunded
4/1/97!) $ 1,500 $ 1,538
Orange County IDA, W. W. Grainger
VRDN (Currently 3.40%) 1,185 1,185
Total Florida (Cost $29,723) 29,723
GEORGIA 5.1%
Atlanta, Airport Fac., 5.00%,
1/1/98 (AMBAC Insured) 5,550 5,573
Burke County Dev. Auth., PCR,
Oglethorpe Power
VRDN (Currently 3.25%)
(FGIC Insured) 2,000 2,000
Cobb County, Water and Sewer
7.50%, 7/1/04 (Prerefunded 7/1/98!) 1,000 1,049
DeKalb Private Hosp. Auth.,
Egleston Childrens Hosp.
VRDN (Currently 3.30%) 13,000 13,000
Georgia, GO
4.00%, 7/1/98 1,895 1,898
7.00%, 6/1/08 (Prerefunded 5/1/98!) 1,200 1,251
7.70%, 4/1/98 2,000 2,041
Metropolitan Atlanta Rapid Transit
Auth., Sales Tax
8.00%, 7/1/18 (FGIC Insured)
(Prerefunded 7/1/98!) 8,430 8,879
Municipal Electric Auth. of Georgia
8.125%, 1/1/20 (Prerefunded
1/1/98!) 500 517
Total Georgia (Cost $36,208) 36,208
HAWAII 0.1%
Hawaii Dept. of Budget and Finance,
Kaiser Parmanente
VRDN (Currently 3.30%) 500 500
Total Hawaii (Cost $500) 500
IDAHO 0.2%
Idaho HFA, Holy Cross Hosp., VRDN
(Currently 3.35%) 1,200 1,200
Total Idaho (Cost $1,200) 1,200
ILLINOIS 9.7%
Chicago Park Dist., GO, TAW, 4.70%,
9/30/97 $ 1,900 $ 1,902
Chicago Public Building Commission,
Chicago Board of Ed.
7.50%, 1/1/98 (FGIC Insured)
(Escrowed to Maturity) 1,000 1,012
Illinois Dev. Fin. Auth., Palos
Community Hosp.
VRDN (Currently 3.30%) 23,000 23,000
Illinois EFA
Advocate Health Care Network
VRDN (Currently 3.30%) 9,800 9,800
Northwestern Univ.
VRDN (Currently 3.40%) 14,800 14,800
VRDN (Currently 4.25%) 1,500 1,500
Illinois HFA
Children's Memorial Hosp.
VRDN (Currently 3.35%) 5,000 5,000
Univ. of Chicago Hosp.
VRDN (Currently 3.30%)
(MBIA Insured) 10,000 10,000
Niles Village, IDR, W. W. Grainger,
VRDN (Currently 3.40%) 1,000 1,000
Springfield Electric, 5.00%, 9/1/97
(Escrowed to Maturity) 1,000 1,000
Total Illinois (Cost $69,014) 69,014
INDIANA 1.3%
Gary, IDR, W. W. Grainger, VRDN
(Currently 3.40%) 730 730
Indiana HFFA, Daughters of Charity,
VRDN (Currently 3.30%) 1,700 1,700
Indianapolis, GO, RAN, Public
Improvement, 4.375%, 1/8/98 7,000 7,015
Total Indiana (Cost $9,445) 9,445
IOWA 0.5%
Sheldon, Sioux Valley Hosp., VRDN
(Currently 3.40%) 3,455 3,455
Total Iowa (Cost $3,455) 3,455
KANSAS 0.1%
Wyandotte County Capital Improvement
Criminal Justice Complex, COP
7.875%, 9/1/07 (Prerefunded
9/1/97!) $ 1,000 $ 1,020
Total Kansas (Cost $1,020) 1,020
KENTUCKY 1.8%
Kentucky Economic Dev. Fin. Auth.
Health Alliance
VRDN (Currently 3.30%)
(MBIA Insured) 5,500 5,500
VRDN (Currently 3.40%)
(MBIA Insured) 7,000 7,000
Total Kentucky (Cost $12,500) 12,500
LOUISIANA 6.6%
East Baton Rouge
Sewer
9.125%, 9/1/06 (Prerefunded
9/1/97!) 6,410 6,602
9.25%, 9/1/12 (Prerefunded 9/1/97!) 2,000 2,060
Louisiana, GO, 4.625%, 8/1/98 (MBIA
Insured) 500 504
Louisiana Offshore Terminal, Deepwater
Port, LOOP
VRDN (Currently 3.50%) 3,510 3,510
Louisiana PFA
Sisters of Charity, VRDN
(Currently 3.30%) 14,700 14,700
Willis Knighton Medical Center
VRDN (Currently 3.35%)
(AMBAC Insured) 12,400 12,400
New Orleans Aviation Board
VRDN (Currently 3.30%)
(MBIA Insured) 6,900 6,900
Total Louisiana (Cost $46,676) 46,676
MARYLAND 9.6%
Anne Arundel County, GO, 6.50%, 6/1/98 1,000 1,018
Baltimore County, GO
Sheppard and Enoch Pratt Hosp.
VRDN (Currently 3.35%) $ 3,200 $ 3,200
Baltimore County
Spring Hill Apartments
VRDN (Currently 3.35%)
(GNMA Guaranteed) 400 400
Frederick County, Sheppard and Enoch
Pratt Hosp.
VRDN (Currently 3.35%) 1,000 1,000
Maryland DOT, 6.30%, 11/1/97 680 683
Maryland HHEFA
Deaton Hosp., VRDN (Currently 3.45%) 7,300 7,300
Helix Health System, VRDN
(Currently 3.40%) 10,000 10,000
Johns Hopkins Univ.
6.20%, 7/1/98 10,255 10,255
Kaiser Permanente, VRDN (Currently
3.25%) 8,900 8,900
Pooled Loan Program, VRDN
(Currently 3.35%) 2,000 2,000
Maryland-National Capital Park and
Planning Commission, GO
BAN, Prince George's County
VRDN (Currently 3.75%) 7,300 7,300
Montgomery County, GO
Consolidated Public Improvement
5.25%, 10/1/97 1,000 1,001
Montgomery County
Single Family, 4.00%, 6/25/98 2,790 2,790
Montgomery County Economic Dev. Auth.
Howard Hughes Medical Fac.
VRDN (Currently 3.35%) 7,900 7,900
Univ. of Maryland, Equipment Loan Program
VRDN (Currently 3.30%) 500 500
Washington Suburban Sanitary Dist., GO
6.00%, 6/1/98 3,750 3,810
Total Maryland (Cost $68,057) 68,057
MASSACHUSETTS 0.4%
Massachusetts HEFA, Harvard Univ., TECP,
3.20%, 9/5/97 2,600 2,600
Total Massachusetts (Cost $2,600) 2,600
MICHIGAN 4.2%
Detroit City School Dist., GO, RAN,
4.50%, 5/1/98 $ 2,500 $ 2,510
Grand Rapids, Water, 7.875%, 1/1/18
(Prerefunded 1/1/98!) 3,500 3,616
Michigan, GO, TAN, 4.50%, 9/30/97 17,000 17,012
Univ. of Michigan Hosp., VRDN
(Currently 3.75%) 6,350 6,350
Total Michigan (Cost $29,488) 29,488
MINNESOTA 0.8%
Cottage Grove, PCR, Minnesota Mining
and Mfg. Co.
VRDN (Currently 3.693%) 1,000 1,000
Rochester Health Care Fac.
Mayo Foundation/Mayo Medical Center
VRDN (Currently 3.55%) 5,000 5,000
Total Minnesota (Cost $6,000) 6,000
MISSISSIPPI 0.2%
Rankin County, PCR, Siemens Energy and
Automation
VRDN (Currently 3.40%) 1,600 1,600
Total Mississippi (Cost $1,600) 1,600
MISSOURI 0.1%
Missouri HEFA, St. Anthony's Medical Center
VRDN (Currently 3.30%) 600 600
Total Missouri (Cost $600) 600
NEW HAMPSHIRE 0.1%
New Hampshire HHEFA, St. Paul's School
VRDN (Currently 3.35%) 1,000 1,000
Total New Hampshire (Cost $1,000) 1,000
NEW JERSEY 0.2%
Brick Township, Municipal Utilities Auth.
4.00%, 12/1/97 (FGIC Insured) 450 450
New Jersey, GO, 4.75%, 2/15/98 1,000 1,004
Total New Jersey (Cost $1,454) 1,454
NEW MEXICO 0.6%
Albuquerque, VRDN (Currently 3.30%) $ 4,000 $ 4,000
Total New Mexico (Cost $4,000) 4,000
NEW YORK 8.3%
Connetquot, GO, TAN, 4.25%, 6/25/98 3,000 3,008
Manhasset Union Free School Dist., GO,
TAN, 4.25%, 6/30/98 3,000 3,011
Nassau County, GO, RAN, 4.50%, 3/10/98 5,700 5,719
New York City, 8.75%, 11/1/15 (Prerefunded
11/1/97!) 1,000 1,023
New York City Municipal Water Fin. Auth.
VRDN (Currently 3.45%) 10,000 10,000
New York State Local Gov't. Assistance
VRDN (Currently 3.20%) 7,000 7,000
New York State Medical Care Fac. Fin. Agency
Buffalo General Hosp.
7.70%, 2/15/22 (FHA Insured)
(Prerefunded 8/15/98!) 6,200 6,540
Greater New York Health Insurance Plan
8.50%, 11/1/15 (Prerefunded
12/1/97!) 2,555 2,575
New York State Thruway Auth., VRDN
(Currently 3.80%) 12,000 12,000
Rochester, GO, BAN, 4.50%, 10/30/97 3,090 3,094
South Huntington Union Free School Dist., GO, TAN
4.10%, 6/30/98 5,000 5,012
Total New York (Cost $58,982) 58,982
NORTH CAROLINA 3.5%
Charlotte Mecklenberg Hosp. Auth., North
Carolina Health Care
VRDN (Currently 3.25%) 9,900 9,900
North Carolina Eastern Municipal
Power Agency
7.625%, 1/1/14 (AMBAC Insured)
(Prerefunded 1/1/98!) 2,070 2,137
7.625%, 1/1/22 (Prerefunded
1/1/98!) 800 826
7.875%, 1/1/19 (Prerefunded
1/1/98!) 1,380 1,427
North Carolina EFA, Bowman Gray School
of Medicine
VRDN (Currently 3.30%) 950 950
Winston Salem, GO, COP
VRDN (Currently 3.35%) $ 9,400 $ 9,400
Total North Carolina (Cost $24,640) 24,640
OHIO 3.6%
Clermont County Hosp. Fac., Mercy Health
VRDN (Currently 3.30%) 3,400 3,400
Dublin City School Dist., GO, 4.33%,
5/13/98 5,000 5,011
Franklin County Hosp.
Holy Cross Health Systems
VRDN (Currently 3.35%) 4,500 4,500
U.S. Health, VRDN (Currently 3.35%) 12,700 12,700
Total Ohio (Cost $25,611) 25,611
OREGON 1.5%
Oregon, GO, Veterans' Welfare, VRDN
(Currently 3.30%) 10,000 10,000
Portland, Sewer, 7.00%, 3/1/03
(Prerefunded 3/1/98!) 500 508
Total Oregon (Cost $10,508) 10,508
PENNSYLVANIA 1.0%
Berks County Municipal Auth.
Pennsylvania Pooled Fin. Program
6.70%, 9/1/07 (Prerefunded
9/1/97!) 2,000 2,000
Montgomery County, IDA, W. W. Grainger
VRDN (Currently 3.40%) 1,230 1,230
Pennsylvania, GO, 6.30%, 1/1/98
(AMBAC Insured) 250 252
Pennsylvania Housing Fin. Agency,
Single Family
4.20%, 10/1/97 1,425 1,425
Philadelphia, GO, TRAN, 4.50%, 6/30/98 2,000 2,008
Total Pennsylvania (Cost $6,915) 6,915
RHODE ISLAND 0.3%
Rhode Island Housing and Mortgage Fin.,
Homeownership
3.65%, 12/2/97 1,800 1,800
Total Rhode Island (Cost $1,800) 1,800
SOUTH CAROLINA 1.0%
Anderson County, Anderson Memorial Hosp.
7.10%, 2/1/01 (MBIA Insured)
(Prerefunded 2/1/98!) $ 1,000 $ 1,032
Spartanburg County, Siemens Energy and
Automation
VRDN (Currently 3.40%) 6,400 6,400
Total South Carolina (Cost $7,432) 7,432
SOUTH DAKOTA 2.3%
South Dakota HEFA, Sioux Valley Hosp.
VRDN (Currently 3.40%) 16,545 16,545
Total South Dakota (Cost $16,545) 16,545
TENNESSEE 0.7%
Knox County Health Ed. and Housing Fac.
Board, Mercy Health
VRDN (Currently 3.30%) 5,000 5,000
Total Tennessee (Cost $5,000) 5,000
TEXAS 12.2%
Dallas County, GO, 7.625%, 8/15/98 1,000 1,035
Dallas County Community College Dist.
VRDN (Currently 3.40%) 17,800 17,800
Harris County, GO, 5.60%, 10/1/97 1,000 1,002
Harris County HFA
Hermann Trust
9.00%, 10/1/17 (Prerefunded
10/1/97!) 1,850 1,894
Memorial Hosp.
VRDN (Currently 3.25%)
(MBIA Insured) 13,600 13,600
Methodist Hosp., VRDN (Currently
3.70%) 5,600 5,600
Sisters of Charity, VRDN
(Currently 3.30%) 5,000 5,000
St. Luke's Episcopal Hosp.
VRDN (Currently 3.75%) 6,200 6,200
Hockley County, IDC, PCR, Amoco Oil,
3.75%, 3/1/98 2,500 2,500
Houston, Water and Sewer, 5.70%, 12/1/97
(AMBAC Insured) 7,000 7,034
Midland, IDC, W. W. Grainger, VRDN
(Currently 3.40%) $ 775 $ 775
Red River Auth., PCR, Southwestern
Public Service
VRDN (Currently 3.40%) 700 700
Texas, GO
7.50%, 10/1/97 2,750 2,758
TRAN, 4.75%, 8/31/98 10,000 10,088
Texas PFA, GO
4.50%, 10/1/97 1,160 1,161
TECP, 3.70%, 10/21/97 6,000 6,000
Texas PFA
Building, 5.00%, 8/1/98 (AMBAC
Insured) 1,025 1,035
Weslaco Health Fac. Dev., Knapp Medical Center
10.375%, 6/1/16
(Prerefunded 6/1/98!) 2,500 2,640
Total Texas (Cost $86,822) 86,822
UTAH 2.0%
Univ. of Utah, Campus Fac., VRDN
(Currently 3.30%) 10,000 10,000
Utah, GO, TECP, 3.80%, 10/7/97 4,000 4,000
Total Utah (Cost $14,000) 14,000
VIRGINIA 5.4%
Big Stone Gap Redev. and Housing, Wallen
Ridge Dev.
4.10%, 9/1/97 1,000 1,000
Peninsula Ports Auth., Shell Oil,
VRDN (Currently 3.80%) 1,000 1,000
Richmond, GO, BAN, VRDN (Currently
3.40%) 5,200 5,200
Roanoke IDA, Roanoke Memorial Hosp.
Carilion Health System
VRDN (Currently 3.25%) 13,795 13,795
Rockingham County IDA, Merck and Company
VRDN (Currently 3.60%) 2,400 2,400
Univ. of Virginia, VRDN (Currently
3.45%) 900 900
Virginia College Building Auth.
Equipment Leasing, 4.25%, 8/1/98 1,100 1,104
Univ. of Richmond, VRDN (Currently
3.45%) 1,150 1,150
Virginia Commonwealth Transportation Board
Oak Grove Connector, 5.00%,
5/15/98 $ 1,450 $ 1,461
Virginia Housing Dev. Auth.,
3.80%, 6/10/98 10,000 9,993
Virginia Public School Auth., School
Fin., 5.50%, 1/1/98 500 503
Total Virginia (Cost $38,506) 38,506
WASHINGTON 2.4%
King County, 7.60%, 12/1/06 (Prerefunded
12/1/97!) 700 707
Port of Seattle, GO, VRDN (Currently
3.30%) 2,200 2,200
Washington, GO
VRDN (Currently 3.30%) 900 900
5.00%, 1/1/98 1,225 1,230
7.10%, 10/1/97
(Escrowed to Maturity) 400 401
Motor Vehicle Fuel Tax
4.90%, 9/1/97 2,000 2,000
6.50%, 1/1/98 2,060 2,079
Washington HFA, Fred Hutchinson Cancer
Research Center
VRDN (Currently 3.65%) 5,650 5,650
Washington Public Power Supply System,
5.00%, 7/1/98 2,170 2,188
Total Washington (Cost $17,355) 17,355
WISCONSIN 1.6%
New Berlin, GO, 4.25%, 12/1/97 865 866
Oak Creek, Wisconsin Electric Power
VRDN (Currently 3.40%) 500 500
Wisconsin, Transportation, TECP
3.60 - 3.70%, 10/7/97 - 10/9/97 10,154 10,154
Total Wisconsin (Cost $11,520) 11,520
WYOMING 0.4%
Uinta County, PCR, Amoco Oil, 3.90%,
12/1/97 2,500 2,502
Total Wyoming (Cost $2,502) 2,502
Total Investments in Securities
101.2% of Net Assets (Cost $718,127) $ 718,127
Other Assets Less Liabilities (8,501)
NET ASSETS $ 709,626
__________
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 142
Accumulated net realized gain/loss -
net of distributions (137)
Paid-in-capital applicable to 709,697,240
shares of $0.01 par value capital stock
outstanding; 5,000,000,000 shares authorized
709,621
NET ASSETS $ 709,626
__________
NET ASSET VALUE PER SHARE $ 1.00
__________
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
COP Certificates of Participation
EFA Educational Facility Authority
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
GNMA Government National Mortgage Association
GO General Obligation
HEFA Health & Educational Facility Authority
HFA Health Facility Authority
HHEFA Health & Higher Educational Facility Authority
IDA Industrial Development Authority
IDC Industrial Development Corp.
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
PFA Public Facility Authority
RAN Revenue Anticipation Note
TAN Tax Anticipation Note
TAW Tax Anticipation Warrant
TECP Tax-Exempt Commercial Paper
TRAN Tax Revenue Anticipation Note
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial
statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited
Statement of Operations
In thousands
6 Months
Ended
8/31/97
Investment Income
Interest income $ 12,869
Expenses
Investment management 1,477
Shareholder servicing 225
Custody and accounting 78
Prospectus and shareholder reports 19
Registration 19
Directors 7
Legal and audit 6
Miscellaneous 5
Total expenses 1,836
Net investment income 11,033
Realized Gain (Loss)
Net realized gain (loss) on securities 34
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 11,067
__________
T. Rowe Price Tax-Exempt Money Fund
Unaudited
Statement of Changes in Net Assets
In thousands
6 Months Year
Ended Ended
8/31/97 2/28/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ 11,033 $ 20,102
Net realized gain (loss) 34 18
Increase (decrease) in net assets
from operations 11,067 20,120
Distributions to shareholders
Net investment income (11,033)
(20,102)
Capital share transactions*
Shares sold 359,856 628,499
Distributions reinvested 10,392 19,039
Shares redeemed (338,791)
(648,564)
Increase (decrease) in net assets
from capital
share transactions 31,457 (1,026)
Net Assets
Increase (decrease) during period 31,491 (1,008)
Beginning of period 678,135 679,143
End of period $709,626 $ 678,135
_____________________
*Share information
Shares sold 359,856 628,499
Distributions reinvested 10,392 19,039
Shares redeemed (338,791)
(648,564)
Increase (decrease) in shares outstanding 31,457
(1,026)
The accompanying notes are an integral part of these financial
statements.
T. Rowe Price Tax-Exempt Money Fund
Unaudited
August 31, 1997
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price Tax-Exempt Money Fund, Inc. (the fund) is
registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company and
commenced operations on April 8, 1981.
Valuation Securities are valued at amortized cost. Assets and
liabilities for which such valuation procedures are deemed not
to reflect fair value are stated at fair value as determined in
good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Premiums and Discounts Premiums and original issue discounts on
municipal securities are amortized for both financial reporting
and tax purposes. Market discounts are recognized upon
disposition of the security as gain or loss for financial
reporting purposes and as ordinary income for tax purposes.
Other Income and expenses are recorded on the accrual basis.
Investment transactions are accounted for on the trade date.
Realized gains and losses are reported on the identified cost
basis. Distributions to shareholders are recorded by the fund on
the ex-dividend date. Income and capital gain distributions are
determined in accordance with federal income tax regulations and
may differ from those determined in accordance with generally
accepted accounting principles.
Note 2 - Federal Income Taxes
No provision for federal income taxes is required since the fund
intends to continue to qualify as a regulated investment company
and distribute all of its income. The fund has unused realized
capital loss carryforwards for federal income tax purposes of
$171,000, which expire in 1998. The fund intends to retain gains
realized in future periods that may be offset by available
capital loss carryforwards.
At August 31, 1997, the aggregate cost of investments for
federal income tax and financial reporting purposes was
$718,127,000.
Note 3 - Related Party Transactions
The investment management agreement between the fund and T. Rowe
Price Associates, Inc. (the manager) provides for an annual
investment management fee, of which $253,000 was payable at
August 31, 1997. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.10% of average
daily net assets and a group fee. The group fee is based on the
combined assets of certain mutual funds sponsored by the manager
or Rowe Price-Fleming International, Inc. (the group). The group
fee rate ranges from 0.48% for the first $1 billion of assets to
0.30% for assets in excess of $80 billion. At August 31, 1997,
and for the six months then ended, the effective annual group
fee rates were 0.32% and 0.33%, respectively. The fund pays a
pro-rata share of the group fee based on the ratio of its net
assets to those of the group.
In addition, the fund has entered into agreements with the
manager and a wholly owned subsidiary of the manager, pursuant
to which the fund receives certain other services. The manager
computes the daily share price and maintains the financial
records of the fund. T. Rowe Price Services, Inc., is the fund's
transfer and dividend disbursing agent and provides shareholder
and administrative services to the fund. The fund incurred
expenses pursuant to these related party agreements totaling
approximately $231,000 for the six months ended August 31, 1997,
of which $44,000 was payable at period-end.
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(registered trademark):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Tax-Exempt Money Fund(registered trademark).
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
Invest With Confidence (registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor.
F52-051 8/31/97
THE SHAREHOLDER LETTER AND REPORT FOR THE COMBINED TAX-FREE
FUNDS ARE ATTACHED HERE BY ACCESSING THE FOLLOWING:
Semiannual Report
Tax-Free
Funds
August 31, 1997
T. Rowe Price
Report Highlights
Tax-Free Funds
o Municipal bonds outperformed Treasuries during most of the
past six months. Inflation remained subdued despite strong
economic growth.
o The spreads between yields on higher- and lower-quality
bonds continued to narrow, resulting in stronger relative
performance for the lower-quality sector of the market.
o All five funds generated modest to good returns for the six
months ended August 31.
o Your funds relied to a great extent on credit research,
yield curve positioning, and duration management to enhance
returns.
o Despite strong economic growth, we believe the environment
is still favorable for fixed income investors due to low
inflation and fiscal restraint.
Fellow Shareholders
The municipal bond market and your funds generated attractive
returns during the six months ended August 31, 1997. Strong
economic growth in the first quarter of 1997 led the Federal
Reserve to raise the federal funds target rate a quarter-point
to 5.50% in March because of concerns that inflation might
accelerate. However, despite robust economic growth, the Fed has
left rates unchanged since March as inflation remained subdued.
MARKET ENVIRONMENT
Interest rates fluctuated as the market wrestled with a
conflicting combination of strong economic growth and declining
inflation. Both money market and longer-term bond yields began
rising before the March rate hike and continued to rise for a
short time afterward in anticipation of further tightening.
However, excellent news on inflation and progress on controlling
the federal budget deficit diminished fears of further rate
increases. Short-term taxable rates subsequently fell in
mid-April to their earlier levels. Long-term taxable bond yields
also began to fall in the late spring after climbing above 7% in
April. The 30-year Treasury bond yield averaged just over 6.50%
in July and August and 6.80% for the past six months, almost
identical to its average over the two preceding years.
Long-term municipal interest rates followed a similar pattern,
rising in March, peaking in April, then falling in late June and
July when data signaled an economic slowdown. Rates reversed in
August as stronger-than-expected economic data changed the
outlook for the third quarter. Municipal bonds outperformed
Treasuries throughout most of the period except for June when
the highest monthly supply in four years overwhelmed demand. The
yield on long-term AAA GO bonds began the six-month period at
5.50% and ranged between 5.75% and 5.15% before settling at
5.35% at the end of August. Five-year AAA GO yields were 4.40%
six months ago and finished at 4.35%, while one-year notes ended
higher at 3.85%, up from 3.70% last February. Overall, both the
municipal and Treasury yield curves flattened as short-term
rates rose modestly in anticipation of further Fed tightening
and long-term rates trended lower on positive inflation news.
Municipal Bond and Note Yields chart
30-Yr AAA 5-Yr AAA 1-Yr Moody
8/31/96 5.75 4.55 3.9
5.55 4.5 3.85
5.5 4.4 3.7
11/96 5.35 4.2 3.7
5.45 4.35 3.6
5.55 4.45 3.7
2/97 5.5 4.35 3.7
5.75 4.75 3.9
5.6 4.8 3.95
5/97 5.5 4.55 3.9
5.45 4.4 3.85
5.15 4.15 3.85
8/31/97 5.35 4.35 3.85
High-yield bonds were the best-performing sector of the tax-free
market, as their yields fell further than those of
investment-grade bonds. While all sectors benefited from an
expanding economy, the impact was strongest on BBB and
lower-rated securities since their issuers' financial condition
had the most room for improvement. This trend was evidenced by
reports from Moody's and Standard & Poor's that upgrades
exceeded downgrades by more than three to one. Expanding use of
insurance on municipal bonds has resulted in a reduced supply of
A rated and BBB rated bonds, which also contributed to the
strength of lower-quality bonds.
The Taxpayer Relief Act of 1997 contained positive news for
municipal bonds, maintaining favorable tax treatment for
corporations that purchase municipals and eliminating the cap on
the amount of outstanding tax-exempt debt permitted for
non-hospital organizations. Also, the reduction in the capital
gains rate should be favorable for long-term investors. However,
the bill did not raise the income thresholds for the alternative
minimum tax, which would have reduced the number of taxpayers
subject to it, as was widely expected.
TAX-EXEMPT MONEY FUND
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
___________________________________________________________
Tax-Exempt Money Fund 1.61% 3.14%
Lipper Tax-Exempt Money
Market Funds Average 1.54 3.01
Our longer-maturity strategy resulted in good returns, enabling
your fund to outperform its peer group during both the 6- and
12-month periods ended August 31, 1997.
The tax-exempt short-term market was fairly stable during the
past six months. Despite the hike in the federal funds rate,
short-term interest rates moved only modestly higher in a calm,
measured fashion. The yield on one-year securities closed the
period 15 basis points (100 basis points equal one percent)
higher than at the end of February and fluctuated within a range
of only 25 basis points.
During the past six months, tax-exempt money fund assets
expanded to a record $154.2 billion, while new issuance of
short-term securities fell 13.3%, or $4.2 billion, from last
year's volume through August. Strong demand, coupled with
contracting supply, helped keep potentially wide yield movements
at bay.
Your fund ended the period with a weighted average maturity of
60 days, close to the 58 days at the end of February. Our
maturity posture was longer than our peer group average of 49
days, as it has been for the last six months. This strategy
enabled us to take advantage of the positively sloped short-term
yield curve, as the difference between overnight and one-year
yields averaged 33 basis points from the end of February through
the end of August.
TAX-FREE SHORT-INTERMEDIATE FUND
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
____________________________________________________________
Tax-Free Short-Intermediate Fund 2.13% 5.33%
Lipper Short-Intermediate
Debt Funds Average 2.17 5.25
Your fund performed roughly in line with the average for its
peer group during the past 6- and 12-month periods, as shown in
the table. Fund exposure to lower-rated bonds enhanced results,
while its slightly shorter duration in June and July detracted
from performance. (For example, a fund with a duration of three
years would fall or rise about 3% in price in response to a one
percentage point rise or fall in interest rates.)
Returns over the last six months were roughly equal to the
coupon earned on a five-year AAA general obligation bond. Yield
spreads between higher- and lower-quality bonds continued to
tighten, causing the latter to outperform the former.
We maintained a slightly defensive posture toward interest rate
risk throughout the period, after shortening duration to 2.8
years from about 3.0 years in January. Through mid-April, as
five-year AAA general obligation yields rose from their February
lows to 4.85%, our defensive posture proved valid. We then began
to extend duration slightly to take advantage of higher yields.
Initial signs of a second quarter economic slowdown began to
emerge, and bond prices started to rise, pushing yields lower.
We began to take profits in June, a bit early as it turned out
since the rally continued into July, driving five-year
high-grade bond yields back down to their February lows. The
fund maintained its conservative posture through August,
performing well relative to its peers.
One effect of the economic expansion was an upgrade in the
credit quality of many issuers. We continued to increase our
allocation to lower-rated issuers whose credit outlook seemed
favorable. New York State lease-backed debt was our largest
exposure to BBB rated securities at the end of August (5.4% of
assets). In line with our expectations, these bonds were
recently upgraded by Standard & Poor's. The favorable outlook
for these bonds caused the yield differential between them and
higher-rated securities to be cut in half since our last
purchase in March. Overall, municipal credit quality should
continue to improve until economic growth slows significantly.
TAX-FREE INSURED INTERMEDIATE BOND FUND
Your fund's defensive duration restrained performance over the
past six and 12 months, resulting in returns that were solid but
slightly lagged the peer group average, as shown in the table.
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
______________________________________________________________
Tax-Free Insured Intermediate
Bond Fund 2.79% 6.91%
Lipper Intermediate
Municipal Debt Funds Average 2.89 7.03
The fund's duration was maintained at a neutral to somewhat
defensive level between 5.3 and 5.5 years throughout the past
six months (see page 3 for an explanation of duration). We
entered the period with a relatively short duration, which
reduced fund exposure to interest rate risk; we had shortened
the fund's duration in February from 5.6 years to 5.3 years
since we considered the risk to be increasing. This moderate
shortening helped fund performance during the early part of the
period but proved to be too conservative over the longer run.
Asset allocation along the yield curve made a significant
contribution to performance. Early in the period, intermediate
yields rose (and prices fell) more than longer-term yields,
producing a flattening of the yield curve in response to a
stronger economy and the Fed's tighter monetary policy. Then, as
the economy appeared to slow in the second quarter, intermediate
yields fell further than long-term yields, causing the yield
curve to steepen once again.
The market share of new issues carrying insurance continued to
increase. Through August, insured bonds accounted for 51% of new
municipal issuance compared with 46% in 1996 and 34% in 1992.
This increase is primarily due to the generally rising credit
quality of municipal bond issuers who have benefited from the
current economic expansion. As credit quality increases, more
issuers qualify for insurance. Nevertheless, we continue our
practice of reviewing the credit quality of each issue as though
it were uninsured.
TAX-FREE INCOME FUND
During the past six months, returns were strong for high-quality
long-term bonds. In this environment, your fund outperformed the
average returns for its peer group during both the 6- and
12-month periods shown in the table.
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
_____________________________________________________________
Tax-Free Income Fund 3.99% 8.98%
Lipper General Municipal
Debt Funds Average 3.87 8.83
Long-term interest rates moved in a range of about 70 basis
points during the past six months, with medium-quality yields
briefly rising near 6.00% and declining to 5.30%.
We kept the fund's duration within a neutral band during the
period,since we did not expect a break outside the trading range
(see page 3 for an explanation of duration). We also shifted the
portfolio to a slightly more "barbelled" maturity structure by
increasing weightings in bonds with maturities beyond 10 years
and shorter than five years, which enabled performance to
benefit from a flattening yield curve. Compared with six months
ago, the fund's weighted average maturity was slightly longer
but its effective duration was slightly shorter, as lower rates
caused more bonds in the portfolio to trade to shorter call
dates.
Lower-quality investments were good performers over the past six
months as some of their issuers enjoyed credit upgrades.
Exposure to BBB and lower-rated investments was trimmed at the
end of August, after we took some profits when yield spreads
narrowed and increased our weighting in A rated securities. We
will continue to add selectively to lower-quality bonds with
positive credit outlooks.
Our goals over the past six months were to maintain or improve
the fund's yield, to look for ways to add value through credit
research, and to lower exposure to the 5- through 10-year
maturity range. Recently, we bought lower-coupon bonds selling
at a discount (below par) for their potential price
appreciation, and also higher-coupon bonds selling at a premium
(above par) for their income. The flatter yield curve created
some relative value in shorter-term bonds, which prompted us to
purchase some one- and two-year maturities.
TAX-FREE HIGH YIELD FUND
Your fund's robust returns exceeded those of its peer group
average for both the 6- and 12-month periods ended August 31, as
shown in the following table.
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
___________________________________________________________
Tax-Free High Yield Fund 4.66% 10.28%
Lipper High Yield Municipal
Debt Funds Average 4.46 9.68
In our last report we mentioned that we expected the high-yield
segment of the market to maintain its narrow yield spreads
versus higher-quality bonds; since then, these spreads have
narrowed even further due to strong demand and lower high-yield
issuance. As the yield gap narrowed, high-yield bonds
outperformed higher-quality bonds on a relative basis. A prime
example of this was the trading activity in general obligation
bonds issued by New York City. Long a benchmark in the BBB
category, New York GO bonds were trading at yields 80 basis
points higher than those of AAA municipals of similar
maturities. That differential declined over the past year to
only 40 basis points. This type of relative performance occurred
generally throughout the high-yield sector.
This ongoing contraction in yields affected the manner in which
we managed the fund-specifically, it dampened our interest in
buying lower-quality bonds. Over the past six months, we allowed
fund exposure to below-investment-grade bonds to fall from 23%
to 20% of net assets, principally through upgrades and
refinancings. We remain buyers of lower-quality bonds when the
returns appear reasonable, keeping in mind our goal of providing
the highest yields possible. However, we will not take
significant risks when the rewards do not appear to be
commensurate. As a result, we do not expect to materially
increase our exposure to lower-quality bonds until the yield
relationships improve.
Quality diversification pie chart on 8/31/97
AAA 7%
AA 27%
A 15%
BBB 31%
BB and Below 20%
We began the six-month period with a duration of 7.2 years, which was neutral
at the time. We shortened it to 6.8 years through most of the period, which
developed into a modestly long position versus our peer group, whose
durations fell even more. At the end of August, duration stood at 7.0 years,
the weighted average maturity at 18.7 years, and fund cash levels were near
5%.
OUTLOOK
The municipal market is facing a pickup in supply in coming months, as
issuers line up to borrow over both the short and long term. Interest rates
have stayed within the narrow range established over the past two years, with
relatively low volatility, and remain attractive for issuers.
Given the high level of consumer and business confidence, we expect the
economy to continue to perform well, although not quite as well as in the
first half of the year. The Federal Reserve has expressed uncertainty about
why inflation has remained so low at this stage of the expansion and is
maintaining a bias toward tightening in an effort to keep inflation in check.
Until signs of accelerating inflation appear, there is little reason for us
to adopt a defensive posture in the funds. The overall environment for fixed
income investors is still favorable, due to continuing low inflation and
fiscal restraint despite above-trend economic growth.
Respectfully submitted,
Mary J. Miller
Director, Municipal Bond Department
September 19, 1997
T. Rowe Price Tax-Free Funds
Portfolio Highlights
Key Statistics
2/28/97 8/31/97
Tax-Exempt Money Fund
_______________________________________________________________________
Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.015 0.016
For 12 months 0.030 0.031
Dividend Yield (7-Day Compound) * 3.02% 3.04%
Weighted Average Maturity (days) 58 60
Weighted Average Quality ** First Tier First Tier
Tax-Free Short-Intermediate Fund
_______________________________________________________________________
Price Per Share $ 5.35 $ 5.33
Dividends Per Share
For 6 months 0.11 0.11
For 12 months 0.23 0.22
Dividend Yield *
For 6 months 4.37% 4.27%
For 12 months 4.39 4.37
Weighted Average Maturity (years) 3.6 3.8
Weighted Average Effective Duration (years) 2.8 2.8
Weighted Average Quality *** AA AA-
T. Rowe Price Tax-Free Funds
Portfolio Highlights
Key Statistics
2/28/97 8/31/97
Tax-Free Insured Intermediate Bond Fund
_______________________________________________________________________
Price Per Share $10.80 $ 10.86
Dividends Per Share
For 6 months 0.24 0.24
For 12 months 0.48 0.48
Dividend Yield *
For 6 months 4.58% 4.44%
For 12 months 4.56 4.56
Weighted Average Maturity (years) 7.4 8.5
Weighted Average Effective Duration (years) 5.3 5.4
Weighted Average Quality *** AA AA
Tax-Free Income Fund
_______________________________________________________________________
Price Per Share $ 9.59 $ 9.71
Dividends Per Share
For 6 months 0.26 0.26
For 12 months 0.52 0.52
Dividend Yield *
For 6 months 5.48% 5.40%
For 12 months 5.54 5.51
Weighted Average Maturity (years) 17.0 17.4
Weighted Average Effective Duration (years) 7.7 7.5
Weighted Average Quality *** AA- AA-
Portfolio Highlights
Key Statistics
2/28/97 8/31/97
Tax-Free High Yield Fund
_______________________________________________________________________
Price Per Share $12.12 $ 12.33
Dividends Per Share
For 6 months 0.35 0.35
For 12 months 0.70 0.70
Dividend Yield *
For 6 months 5.94% 5.74%
For 12 months 6.02 5.92
Weighted Average Maturity (years) 19.1 18.7
Weighted Average Effective Duration (years) 7.2 7.0
Weighted Average Quality *** BBB+ A-
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the average daily net asset values per share for the same
period.
** All securities purchased in the money fund are rated in the two highest
categories (tiers) as established by national rating agencies or, if
unrated, are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
T. Rowe Price Tax-Free Funds
Average Annual Compound Total Return
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended Since Inception
8/31/97 1 Year 5 Years 10 Years Inception Date
_____________________________________________________________________
Tax-Exempt Money3.14% 2.77% 3.72% - 4/8/81
Tax-Free Short-
Intermediate 5.33 4.73 5.45 - 12/23/83
Tax-Free Insured
Intermediate
Bond 6.91 - - 6.64% 11/30/92
Tax-Free Income 8.98 6.95 7.51 - 10/26/76
Tax-Free High
Yield10.28 7.49 8.39 - 3/1/85
Investment returns represent past performance and will vary. Shares of the
bond funds may be worth more or less at redemption than at original purchase.
The Money Fund's $1.00 share price is not guaranteed, nor is the fund insured
or guaranteed by the U.S. government.
Performance Comparison
These charts show the value of a hypothetical $10,000 investment in each fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
Tax-Exempt Money Fund SEC Chart
Lipper Tax-Exempt T. Rowe Price
Money Market Tax-Exempt
Funds Index Money Fund
8/31/87 $ 10,000 $ 10,000
8/88 10,458 10,470
8/89 11,066 11,086
8/90 11,679 11,694
8/91 12,227 12,211
8/92 12,610 12,575
8/93 12,867 12,838
8/94 13,124 13,118
8/95 13,543 13,547
8/96 13,956 13,976
8/97 $ 14,380 $ 14,416
Tax-Free High Yield Fund SEC Chart
Lipper High Yield T. Rowe Price
Lehman Revenue Municipal Debt High Yield
Bond Index Funds Average Fund
8/31/87 $ 10,000 $ 10,000 $10,000
8/88 10,854 10,714 10,671
8/89 12,191 11,940 11,811
8/90 12,995 12,568 12,637
8/91 14,620 13,851 13,993
8/92 16,347 15,301 15,595
8/93 18,477 17,071 17,652
8/94 18,449 17,252 17,787
8/95 20,091 18,585 19,172
8/96 21,264 19,584 20,290
8/97 $ 23,350 $ 21,465 $22,376
Tax-Free Income Fund SEC Chart
Lipper General T. Rowe Price
Lehman Municipal Municipal Debt Tax-Free
Bond Index Funds Average Income Fund
8/31/87 $10,000 $10,000 $ 10,000
8/88 10,688 10,684 10,472
8/89 11,862 11,888 11,263
8/90 12,623 12,447 11,860
8/91 14,111 13,923 13,201
8/92 15,687 15,507 14,740
8/93 17,601 17,421 16,733
8/94 17,626 17,250 16,600
8/95 19,188 18,556 17,945
8/96 20,193 19,467 18,924
8/97 $22,060 $21,257 $ 20,623
Tax-Free Short-Intermediate Fund SEC Chart
Lipper Short- T. Rowe Price
Lehman 3-Year Intermediate Debt Tax-Free Short-
GO Bond Index Funds Average Intermediate Fund
8/31/87 $ 10,000 $10,000 $ 10,000
8/88 10,417 10,514 10,431
8/89 11,112 11,196 11,026
8/90 11,844 11,901 11,734
8/91 12,891 12,892 12,599
8/92 14,023 13,919 13,492
8/93 14,947 14,949 14,367
8/94 15,333 15,228 14,679
8/95 16,381 16,126 15,542
8/96 17,026 16,728 16,139
8/97 $ 17,972 $17,647 $ 16,999
Tax-Free Insured Intermediate Fund SEC chart
Lipper Intermediate Tax-Free
Lehman 7-Year GO Municipal Debt Insured Intermediate
Bond Index Funds Average Bond Fund
11/30/92 $ 10,000 $ 10,000 $ 10,000
8/93 10,900 10,892 11,103
8/94 11,022 11,011 11,308
8/95 12,008 11,810 12,212
8/96 12,499 12,300 12,696
8/97 $ 13,489 $ 13,191 $ 13,572
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access (registered trademark)
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Tax-Free Funds.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
Invest With Confidence (registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor.
C03-051 8/31/97
