<PAGE>
November 10, 2000
FUND PROFILE
T. ROWE PRICE FUNDS
Prime Reserve New Income Equity Income International Stock
A selection of stock, bond, and money market funds to help investors meet their
financial objectives.
This profile summarizes key information about each fund that is included in each
fund's prospectus. Each fund's prospectus includes additional information about
each fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about each fund at no cost by
calling 1-800-638-5660, or by visiting our Web site at www.troweprice.com.
(T. ROWE PRICE RAM LOGO)
<PAGE>
<PAGE>
FUND PROFILE
---------------------------------------------------------
Prime Reserve Fund
What is the fund's objective?
The fund's goals are preservation of capital, liquidity, and, consistent with
these, the highest possible current income.
What is the fund's principal investment strategy?
The fund, which is managed to provide a stable share price of $1.00, invests
in high-quality, U.S. dollar-denominated money market securities. The fund's
average weighted maturity will not exceed 90 days, and its yield will
fluctuate with changes in short-term interest rates. In selecting securities,
fund managers may examine the relationships among yields on various types and
maturities of money market securities in the context of their outlook for
interest rates. For example, commercial paper often offers a yield advantage
over Treasury bills. If rates are expected to fall, longer maturities, which
typically have higher yields than shorter maturities, may be purchased to try
to preserve the fund's income level. Conversely, shorter maturities may be
favored if rates are expected to rise.
The fund may sell holdings for a variety of reasons, such as to adjust the
portfolio's average maturity or quality, or to shift assets into
higher-yielding securities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
Since the fund seeks to maintain a $1.00 share price, it should have little
risk of principal loss. However, there is no assurance the fund will avoid
principal losses in the rare event that holdings default or interest rates
rise sharply in an unusually short period.
The fund's yield will vary; it is not fixed for a specific period like the
yield on a bank certificate of deposit. This is a disadvantage when interest
rates are falling. An investment in the fund is not insured or guaranteed by
the FDIC or any other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money
by investing in the fund.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
<PAGE>
FUND PROFILE
---------------------------------------------------------
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. Over time, money market securities have provided
greater stability but lower returns than bonds or stocks. If you have some
money for which safety and accessibility are more important than total return
or capital growth over time, the fund should be an appropriate investment.
The fund can be used for both regular and tax-deferred accounts, such as IRAs
and Keoghs.
New Income Fund
What is the fund's objective?
The fund seeks the highest level of income consistent with the preservation
of capital over time by investing primarily in marketable debt securities.
What is the fund's principal investment strategy?
We will invest at least 80% of the fund's total assets in income-producing
securities, which may include U.S. government and agency obligations,
mortgage- and asset-backed securities, corporate bonds, foreign securities,
collateralized mortgage obligations (CMOs), and others, including, on
occasion, equities.
All securities purchased by the fund must be rated investment grade (AAA, AA,
A, or BBB) by at least one major credit rating agency or, if unrated, must
have a T. Rowe Price equivalent rating. Up to 15% of total assets may be
invested in "split-rated securities," or those rated investment grade by at
least one rating agency, but below investment grade by others. However, none
of the fund's remaining assets can be invested in bonds rated below
investment grade by Standard & Poor's, Moody's, or Fitch IBCA, Inc.
We have considerable flexibility in seeking high yield for the fund. There
are no maturity restrictions, so we can purchase longer-term bonds which tend
to have higher yields than shorter-term issues. However, the portfolio's
weighted average maturity is expected to be between four and 15 years. In
addition, when there is a large yield difference between the various quality
levels, we may move down the credit scale and purchase lower-rated bonds with
higher yields. When the difference is small, we may concentrate investments
in the higher-rated issues.
We may also invest in other securities, including futures and options, in
keeping with the fund's objective.
The fund may sell holdings for a variety of reasons, such as to adjust the
portfolio's average maturity, or to shift assets into higher-yielding
securities.
<PAGE>
FUND PROFILE
---------------------------------------------------------
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
. Interest rate risk Investors should be concerned primarily with this risk.
An increase in interest rates could cause the fund's share price to fall,
resulting in a loss of principal. That's because the bonds and notes in the
fund's portfolio become less attractive to other investors when securities
with higher yields become available. Even GNMAs and other securities whose
principal and interest payments are guaranteed by the U.S. government can
decline in price if rates rise. The longer a bond's maturity, the greater its
potential for price declines if rates rise and for price gains if rates fall.
Because the fund may invest in bonds of any maturity, it carries more
interest rate risk than short-term bond funds.
. Credit risk This is the chance that any of a fund's holdings will have its
credit rating downgraded or will default (fail to make scheduled interest or
principal payments), potentially reducing the fund's income level and share
price. While the fund's overall credit quality is high, BBB securities are
more susceptible to adverse economic conditions and some may have speculative
characteristics.
. The fund may continue to hold a security that has been downgraded or loses
its investment-grade rating after purchase.
. Foreign investing risk To the extent the fund holds foreign bonds, it will
be subject to special risks whether the bonds are denominated in U.S. dollars
or foreign currencies. These risks include potentially adverse political and
economic developments overseas, greater volatility, lower liquidity, and the
possibility that foreign currencies will decline against the dollar, lowering
the value of securities denominated in those currencies and possibly the
fund's share price. Currency risk can affect the fund to the extent that it
holds nondollar foreign bonds.
. Prepayment risk and extension risk A mortgage-backed bond, unlike most other
bonds, can be hurt when interest rates fall, because homeowners tend to
refinance and prepay principal. The loss of high-yielding, underlying
mortgages and the reinvestment of proceeds at lower interest rates can reduce
the bond's potential price gain in response to falling interest rates, reduce
the bond's yield, or even cause the bond's price to fall below what an
investor paid for it, resulting in a capital loss. Any of these developments
could cause a decrease in the fund's income, share price, or total return.
<PAGE>
FUND PROFILE
---------------------------------------------------------
Extension risk refers to a rise in interest rates that causes a fund's
average maturity to lengthen unexpectedly due to a drop in mortgage
prepayments. This would increase the fund's sensitivity to rising rates and
its potential for price declines.
. Derivatives risk Shareholders are also exposed to derivatives risk, the
potential that our investments in these complex and volatile instruments
could affect the fund's share price. In addition to CMOs and better-known
instruments such as futures, other derivatives that may be used in limited
fashion by the fund include interest-only (IO) and principal-only (PO)
securities known as "strips." The value of these instruments is derived from
an underlying pool of mortgage-backed securities or a CMO. All these
instruments can be highly volatile, and their value can fall dramatically in
response to rapid or unexpected changes in the mortgage or interest rate
environment.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. The fund may be appropriate for you if you seek an
attractive level of income and are willing to accept the risk of a declining
share price when interest rates rise. Steadily reinvesting the fund's income
is a conservative strategy for building capital over time. If you are
investing primarily for safety and liquidity, you should consider a money
market fund.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. The fund should not represent your complete investment program or be used
for short-term trading purposes.
Equity Income Fund
What is the fund's objective?
The fund seeks to provide substantial dividend income as well as long-term
growth of capital through investments in the common stocks of established
companies.
<PAGE>
FUND PROFILE
---------------------------------------------------------
What is the fund's principal investment strategy?
We will normally invest at least 65% of the fund's total assets in the common
stocks of well-established companies paying above-average dividends.
We typically employ a "value" approach in selecting investments. Our in-house
research team seeks companies that appear to be undervalued by various
measures and may be temporarily out of favor, but have good prospects for
capital appreciation and dividend growth.
In selecting investments, we generally look for companies with the following:
. an established operating history;
. above-average dividend yield relative to the S&P 500;
. low price/earnings ratio relative to the S&P 500;
. a sound balance sheet and other positive financial characteristics; and
. low stock price relative to a company's underlying value as measured by
assets, cash flow, or business franchises.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market as a whole can decline for many reasons, including adverse
political or economic developments here or abroad, changes in investor
psychology, or heavy institutional selling. The prospects for an industry or
company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. In
addition, our assessment of companies held in the fund may prove incorrect,
resulting in losses or poor performance even in a rising market. Finally, the
fund's investment approach could fall out of favor with the investing public,
resulting in lagging performance versus other types of stock funds.
<PAGE>
FUND PROFILE
---------------------------------------------------------
The value approach carries the risk that the market will not recognize a
security's intrinsic value for a long time, or that a stock judged to be
undervalued may actually be appropriately priced.
The fund's emphasis on stocks of established companies paying high dividends
and its potential investments in fixed-income securities may limit its
potential for appreciation in a broad market advance. Such securities may be
hurt when interest rates rise sharply. Also, a company may reduce or
eliminate its dividend.
Foreign stock holdings are subject to the risk that some holdings may lose
value because of declining foreign currencies or adverse political or
economic events overseas. Investments in futures and options, if any, are
subject to additional volatility and potential losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of common stock investments. If you seek
a relatively conservative equity investment that provides substantial
dividend income along with the potential for capital growth, the fund could
be an appropriate part of your overall investment strategy. This fund should
not represent your complete investment program or be used for short-term
trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
International Stock Fund
What is the fund's objective?
The fund seeks long-term growth of capital through investments primarily in
the common stocks of established non-U.S. companies.
What is the fund's principal investment strategy?
We expect to invest substantially all of the fund's assets outside the U.S.
and to diversify broadly among developed and emerging countries throughout
the
<PAGE>
FUND PROFILE
---------------------------------------------------------
world. Stock selection reflects a growth style. We may purchase the stocks of
companies of any size, but our focus will typically be on large and, to a
lesser extent, medium-sized companies.
Growth Investing
Selection of common stocks reflects a growth style. T. Rowe Price
International, Inc. ("T. Rowe Price International") employs in-depth
fundamental research in an effort to identify companies capable of
achieving and sustaining above-average, long-term earnings growth. We seek
to purchase such stocks at reasonable prices in relation to present or
anticipated earnings, cash flow, or book value, and valuation factors often
influence our allocations among large-, mid-, or small-cap shares.
While we invest with an awareness of the global economic backdrop and our
outlook for individual countries, bottom-up stock selection is the focus of
our decision-making. Country allocation is driven largely by stock
selection, though we may limit investments in markets that appear to have
poor overall prospects.
In selecting stocks, we generally favor companies with one or more of the
following characteristics:
. leading market position;
. attractive business niche;
. strong franchise or monopoly;
. technological leadership or proprietary advantages;
. seasoned management;
. earnings growth and cash flow sufficient to support growing dividends;
and
. healthy balance sheet with relatively low debt.
While the fund invests primarily in common stocks, to a lesser extent the
fund may also purchase other securities, including futures and options, in
keeping with the fund's objective.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all stock funds, this fund's share price can fall because of weakness
in one or more of its primary equity markets, a particular industry, or
specific
<PAGE>
FUND PROFILE
---------------------------------------------------------
holdings. Stock markets can decline for many reasons, including adverse
political or economic developments, changes in investor psychology, or heavy
institutional selling. The prospects for an industry or company may
deteriorate because of a variety of factors, including disappointing earnings
or changes in the competitive environment. In addition, our assessment of
companies held in the fund may prove incorrect, resulting in losses or poor
performance even in rising markets.
Funds that invest overseas generally carry more risk than funds that invest
strictly in U.S. assets. Even investments in countries with highly developed
economies are subject to significant risks. Some particular risks affecting
this fund include the following:
. Currency risk This refers to a decline in the value of a foreign currency
versus the U.S. dollar, which reduces the dollar value of securities
denominated in that currency. The overall impact on a fund's holdings can be
significant, unpredictable and long-lasting depending on the currencies
represented in the portfolio and how each one appreciates or depreciates in
relation to the U.S. dollar, and whether currency positions are hedged. Under
normal conditions, the fund does not engage in extensive foreign currency
hedging programs. Further, exchange rate movements are unpredictable and it
is not possible to effectively hedge the currency risks of many developing
countries.
. Geographic risk The economies and financial markets of certain regions-such
as Latin America and Asia-can be highly interdependent and may decline all at
the same time.
. Emerging market risk To the extent the fund invests in emerging markets, it
is subject to greater risk than a fund investing only in developed markets.
The economic and political structures of developing nations, in most cases,
do not compare favorably with the U.S. or other developed countries in terms
of wealth and stability, and their financial markets often lack liquidity.
Fund performance will likely be negatively affected by portfolio exposure to
nations in the midst of hyperinflation, currency devaluation, trade
disagreements, sudden political upheaval, or interventionist government
policies. Significant buying or selling actions by a few major investors may
also heighten the volatility of emerging markets. These factors make
investing in such countries significantly riskier than in other countries and
any one of them could cause the fund's share price to decline.
. Other risks of foreign investing Other risks result from the varying stages
of economic and political development, the differing regulatory environments,
trading days and accounting standards, and higher transaction costs of
non-U.S. markets. Investments outside the United States could be subject to
actions such as capital or currency controls, nationalizing a company or
<PAGE>
FUND PROFILE
---------------------------------------------------------
industry, expropriating assets, or imposing punitive taxes which would have
an adverse effect on the fund.
. While certain countries have made progress in economic growth,
liberalization, fiscal discipline, and political and social stability,
there is no assurance these trends will continue.
. Futures/options risk To the extent the fund uses futures and options, it is
exposed to additional volatility and potential losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of common stock and international
investments. If you want to diversify your domestic stock portfolio by adding
exposure foreign investments, seek the long-term capital appreciation
potential of growth stocks, and are comfortable with the risks that accompany
foreign investments, the fund could be an appropriate part of your overall
investment strategy. This fund should not represent your complete investment
program or be used for short-term trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
All Funds
How have the funds performed in the past?
The bar charts showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next and over time. Fund past performance is no guarantee of
future returns.
The funds can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
charts.
<PAGE>
FUND PROFILE
---------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
LOGO LOGO
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
LOGO LOGO
</TABLE>
<TABLE>
<CAPTION>
Calendar Year Total Returns
Fund "90" "91" "92" "93" "94" "95" "96" "97" "98" "99"
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
Prime Reserve 7.73 5.67 3.34 2.60 3.74 5.48 4.90 5.10 5.13 4.71
New Income 8.77 15.51 4.96 9.58 -2.22 18.36 2.38 9.32 5.04 -1.58
--------------------------------------------------------------------------------------------
Equity Income -6.79 25.28 14.13 14.84 4.53 33.35 20.40 28.82 9.23 3.82
International -8.89 15.87 -3.47 40.11 -0.76 11.39 15.99 2.70 16.14 34.60
Stock
--------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FUND PROFILE
---------------------------------------------------------
Prime Reserve Fund Quarter ended Total return
Best quarter 6/30/90 1.91%
Worst quarter 6/30/93 0.62%
New Income Fund Quarter ended Total return
Best quarter 6/30/95 5.83%
Worst quarter 3/31/96 -2.53%
Equity Income Fund Quarter ended Total return
Best quarter 3/31/91 14.76%
Worst quarter 9/30/90 -13.46%
International Stock Fund Quarter ended Total return
Best quarter 12/31/99 24.70%
Worst quarter 9/30/90 -18.70%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended
09/30/2000
Shorter of 10 years Inception
1 year 5 years or since inception date
------------------------
<S> <C> <C> <C> <C> <S>
Prime Reserve Fund 5.80% 5.13% 4.70% 1/26/76
Lipper Money Market
Funds Average 5.43 4.95 4.65
New Income Fund 6.18% 5.21% 7.14% 8/31/73
Lehman Brothers US
Aggregate Index 6.99 6.47 8.05
Lipper Corp. Debt
Funds A-Rated Average 5.36 5.39 7.78
Equity Income Fund 4.80% 14.48% 16.35% 10/31/85
S&P 500 Stock Index 13.28 21.69 19.44
Lipper Equity Income
Funds Average 8.17 13.56 14.84
International Stock
Fund 10.02% 11.03% 11.75% 5/9/80
MSCI EAFE Index 3.42 8.88 9.95
Lipper International 10.77 10.37 10.43
Funds Average
-------------------------------------------------------------------------------
</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
Lehman indices do not reflect the deduction of any fees or expenses.
<PAGE>
FUND PROFILE
---------------------------------------------------------
What fees or expenses will I pay?
The funds are 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees. Redemption proceeds of less than $5,000 sent by wire are
subject to a $5 fee paid to the fund.
<TABLE>
Table 2 Fees and Expenses of the Funds
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
Prime New Equity International
Reserve Income Income Stock
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <S>
Management fee 0.37% 0.47% 0.57% 0.67%
Other expenses 0.25 0.26 0.20 0.18
Total annual fund operating expenses 0.62 0.73 0.77 0.85
--------------------------------------------------------------------------------------------
</TABLE>
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
these funds with that of other mutual funds. Although your actual costs may
be higher or lower, the table shows how much you would pay if operating
expenses remain the same, you invest $10,000, earn a 5% annual return, and
hold the investment for the following periods and then redeem:
<TABLE>
<CAPTION>
Fund 1 year 3 years 5 years 10 years
----------------------------------------------------------------
<S> <C> <C> <C> <C> <S>
Prime Reserve $63 $199 $346 $ 774
-------------------------------------
New Income 75 233 406 906
-------------------------------------
Equity Income 79 246 428 954
-------------------------------------
International Stock 87 271 471 1,049
----------------------------------------------------------------
</TABLE>
Who manages each fund?
Prime Reserve, New Income, and Equity Income Funds
Each fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
Prime Reserve Fund Edward A. Wiese manages the fund day-to-day and has been
chairman of its Investment Advisory Committee since 1990. He joined T. Rowe
Price in 1984 and has been managing investments since 1985.
New Income Fund William T. Reynolds manages the fund day-to-day and has been
chairman of its Investment Advisory Committee since 1998. He joined T. Rowe
Price in 1981 and has been managing investments since 1978.
<PAGE>
FUND PROFILE
---------------------------------------------------------
Equity Income Fund Brian C. Rogers manages the fund day-to-day and has been
chairman of its Investment Advisory Committee since 1993. He joined T. Rowe
Price in 1982 and has been managing investments since 1983.
International Stock Fund
T. Rowe Price International is responsible for the selection and management
of the fund's portfolio investments. The company, a wholly owned subsidiary
of T. Rowe Price Associates, is the successor to Rowe Price-Fleming
International ("Price-Fleming"), a joint venture established in 1979 between
T. Rowe Price Associates and Robert Fleming Holdings ("Flemings"). In 2000,
T. Rowe Price became the sole owner of Rowe Price-Fleming and renamed the
company T. Rowe Price International. The U.S. office of T. Rowe Price
International is located at 100 East Pratt Street, Baltimore, Maryland 21202.
Offices are also located in London, Tokyo, Singapore, Hong Kong, Buenos
Aires, and Paris.
The fund has an Investment Advisory Group that has day-to-day responsibility
for managing the portfolio and developing and executing its investment
program. The advisory group consists of John R. Ford, who joined
Price-Fleming in 1982 and has 20 years of experience with the Fleming Group
in research and portfolio management; James B.M. Seddon, who joined
Price-Fleming in 1987 and has 13 years of experience in portfolio management;
Mark C.J. Bickford-Smith, who joined Price-Fleming in 1995 and has 15 years
of experience with the Fleming Group in research and financial analysis; and
David J.L. Warren, who joined Price-Fleming in 1983 and has 19 years of
experience in equity research, fixed income research, and portfolio
management.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
<PAGE>
FUND PROFILE
---------------------------------------------------------
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee.
When will I receive income and capital gain distributions?
. The International Stock Fund declares and pays a dividend (if any) annually.
The dividends will not be eligible for the 70% deduction for dividends
received by corporations, if, as expected, none of the fund's income consists
of dividends paid by U.S. corporations.
. The Equity Income Fund declares and pays a dividend (if any) quarterly. A
portion of fund dividends may be eligible for the 70% deduction for dividends
received by corporations.
. The New Income Fund declares income dividends daily at 4 p.m. ET to
shareholders of record at that time provided payment has been received on the
previous business day.
. The Prime Reserve Fund declares income dividends daily to shareholders of
record as of 12 noon ET on that day. Wire purchase orders received before 12
noon ET receive the dividend for that day. Other purchase orders receive the
dividend for the next business day after payment has been received.
. Dividends for the New Income Fund and Prime Reserve Fund are ordinarily paid
on the first business day of each month.
. Fund shares will earn dividends through the date of redemption; also, shares
redeemed on a Friday or prior to a holiday will continue to earn dividends
until the next business day. Generally, if you redeem all of your shares at
any time during the month, you will also receive all dividends earned through
the date of redemption in the same check. When you redeem only a portion of
your shares, all dividends accrued on those shares will be reinvested, or
paid in cash, on the next dividend payment date.
Capital gains
. Since money funds are managed to maintain a constant share price, the Prime
Reserve Fund is not expected to make capital gain distributions.
. A capital gain or loss is the difference between the purchase and sale price
of a security.
. If a fund has net capital gains for the year (after subtracting any capital
losses), they are usually declared and paid in December to shareholders of
record on a specified date that month. For the Equity Income Fund, if a
second distribution is necessary, it is usually declared and paid during the
first quarter of the following year.
<PAGE>
FUND PROFILE
---------------------------------------------------------
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
<PAGE>
FUND PROFILE
---------------------------------------------------------
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
(LOGO)
RPS C00-035
T. Rowe Price Investment Services, Inc., Distributor
