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Filed Pursuant to Rule 497(e)
Registration File No.: 333-18953
SUPPLEMENT TO THE PROSPECTUS OF
PRIME INCOME TRUST
DATED JANUARY 23, 1998
The fourth paragraph of the section entitled "Investment Advisory
Agreement" in the above Prospectus is revised to reflect that, effective May
1, 1998, the Trustees of the Trust have amended the Trust's Investment
Advisory Agreement to reduce the compensation received by the Investment
Adviser under the Agreement for assets exceeding $1.5 billion, so that the
compensation under the Agreement is calculated daily by applying the
following annual rates to the Trust's net assets determined as of the close
of each business day: 0.90% of the portion of daily net assets not exceeding
$500 million; 0.85% of the next $1 billion; and 0.825% of the portion of
daily net assets exceeding $1.5 billion.
May 1, 1998
