SCUDDER
Scudder New York Tax Free Fund
Scudder New York Tax Free Money Fund
Supplement to Prospectus dated August 1, 1997
The information below replaces the table on page 7 of the prospectus.
Tax-exempt vs. taxable income
Tax Free Yields and Corresponding Taxable Equivalents: The table below shows New
York City taxpayers what an investor would have to earn from a comparable
taxable investment to equal Scudder New York Tax Free Fund and Scudder New York
Tax Free Money Fund's triple tax-free yield. Today many investors may find that
regular federal income tax and New York City and New York state personal income
tax rates make these Funds attractive alternatives to investments paying taxable
income.
<TABLE>
<CAPTION>
1997 TAXABLE INCOME: COMBINED MARGINAL TO EQUAL HYPOTHETICAL TAX-FREE YIELDS OF 5%, 7% AND
TAX 9%, A TAXABLE INVESTMENT WOULD HAVE TO EARN*:
INDIVIDUAL JOINT RETURN RATE: 5% 7% 9%
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<S> <C> <C> <C> <C> <C> <C>
$25,000-50,000 $45,000-90,000 35.68% 7.77% 10.88% 13.99%
50,001-59,750 90,001-99,600 35.73 7.78 10.89 14.00
59,751-124,650 99,601-151,750 38.40 8.12 11.36 14.61
124,651-271,050 151,751-271,050 42.87 8.75 12.25 15.75
OVER $271,050 OVER $271,050 46.08 9.27 12.98 16.69
</TABLE>
Combined marginal tax rates are adjusted for the deductibility of state and City
taxes. *These illustrations assume a marginal federal income tax rate of 28% to
39.6% and that the federal alternative minimum tax is not applicable. Upper
income individuals may be subject to an effective federal income tax rate in
excess of the applicable marginal rate as a result of the phase-out of personal
exemptions and itemized deductions made permanent by the Revenue Reconciliation
Act of 1993. Moreover, upper income taxpayers will also be subject to a tax
table benefit recapture imposed by New York state that will have the effect of
increasing their effective tax rate. Individuals subject to these phase-out
provisions would have to invest in taxable securities with a yield in excess of
those shown on the table in order to achieve an after-tax yield equivalent to
the yield on a comparable tax-exempt security.
August 1, 1997
