AMCAP Fund

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AMCAP FUND, INC.

Part B
Statement of Additional Information

May 1, 2005
(as supplemented April 1, 2006)

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of AMCAP Fund (the "fund" or
"AMCAP") dated May 1, 2005. You may obtain a prospectus from your financial
adviser or by writing to the fund at the following address:

AMCAP Fund, Inc.
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200

Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them. They should contact their employers for details.

TABLE OF CONTENTS

Item Page no.
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Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 2
Fundamental policies and investment restrictions. . . . . . . . . . 6
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 8
Execution of portfolio transactions . . . . . . . . . . . . . . . . 27
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 28
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 31
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 35
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 40
Rollovers from retirement plans to IRAs . . . . . . . . . . . . . . 44
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Shareholder account services and privileges . . . . . . . . . . . . 46
General information . . . . . . . . . . . . . . . . . . . . . . . . 48
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Financial statements

AMCAP Fund -- Page 1
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CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal circumstances, and are based on a percentage of the fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the fund's investment limitations.

GENERAL GUIDELINES

. The fund will invest primarily in stocks of companies domiciled in the
United States. In determining whether a company is domiciled in the United
States, the fund's investment adviser will consider the domicile
determination of a leading securities index and may also take into account
such factors as where the company is legally organized and/or maintains
principal corporate offices and/or conducts its principal operations. The
fund may invest in non-U.S. securities to a limited extent.

. The fund may also invest in securities convertible into common stocks,
straight debt securities (i.e., not convertible into equity), cash or cash
equivalents, U.S. government securities or nonconvertible preferred stocks.

DEBT SECURITIES

. The fund may invest in debt securities with an investment grade rating by
Standard & Poor's Corporation or Moody's Investors Service (or unrated but
considered to be of equivalent quality).

* * * * * *

The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.

DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment objective, strategies and risks."

EQUITY SECURITIES -- Equity securities represent an ownership position in a
company. Equity securities held by the fund typically consist of common stocks.
The prices of equity securities fluctuate based on, among other things, events
specific to their issuers and market, economic and other conditions.

There may be little trading in the secondary market for particular equity
securities, which may adversely affect the fund's ability to value accurately or
dispose of such equity securities. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the value and/or
liquidity of equity securities.

The growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss.

DEBT SECURITIES -- Debt securities are used by issuers to borrow money.
Generally, issuers pay investors interest and may repay the amount borrowed
periodically during the life of the security

AMCAP Fund -- Page 2
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or at maturity. Some debt securities, such as zero coupon bonds, do not pay
current interest, but are purchased at a discount from their face values and
accrue interest at the applicable coupon rate over a specified time period. The
market prices of debt securities fluctuate depending on such factors as interest
rates, credit quality and maturity. In general, market prices of debt securities
decline when interest rates rise and increase when interest rates fall.

Certain additional risk factors relating to debt securities are discussed below:

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES -- Debt securities may be
sensitive to economic changes, political and corporate developments, and
interest rate changes. In addition, during an economic downturn or
substantial period of rising interest rates, issuers that are highly
leveraged may experience increased financial stress that would adversely
affect their ability to meet projected business goals, to obtain additional
financing and to service their principal and interest payment obligations.
Periods of economic change and uncertainty also can be expected to result
in increased volatility of market prices and yields of certain debt
securities.

PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
provisions. If an issuer exercises these provisions in a lower interest
rate market, the fund would have to replace the security with a lower
yielding security, resulting in decreased income to investors. If the
issuer of a debt security defaults on its obligations to pay interest or
principal or is the subject of bankruptcy proceedings, the fund may incur
losses or expenses in seeking recovery of amounts owed to it.

LIQUIDITY AND VALUATION -- There may be little trading in the secondary
market for particular debt securities, which may affect adversely the
fund's ability to value accurately or dispose of such debt securities.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the value and/or liquidity of debt
securities.

The investment adviser attempts to reduce the risks described above through
diversification of the fund's portfolio and by credit analysis of each issuer,
as well as by monitoring broad economic trends and corporate and legislative
developments, but there can be no assurance that it will be successful in doing
so.

SECURITIES WITH EQUITY AND DEBT CHARACTERISTICS -- The fund may invest in
securities that have a combination of equity and debt characteristics. These
securities may at times behave more like equity than debt and vice versa. Some
types of convertible bonds or preferred stocks automatically convert into common
stocks. The prices and yields of nonconvertible preferred stocks generally move
with changes in interest rates and the issuer's credit quality, similar to the
factors affecting debt securities. Certain of these securities will be treated
as debt for fund investment limit purposes.

Convertible bonds, convertible preferred stocks and other securities may
sometimes be converted, or may automatically convert, into common stocks or
other securities at a stated conversion ratio. These securities, prior to
conversion, may pay a fixed rate of interest or a dividend. Because convertible
securities have both debt and equity characteristics, their value varies in
response to many factors, including the value of the underlying assets, general
market and economic conditions, and convertible market valuations, as well as
changes in interest rates, credit spreads and the credit quality of the issuer.

AMCAP Fund -- Page 3
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U.S. GOVERNMENT OBLIGATIONS -- U.S. government obligations are securities backed
by the full faith and credit of the U.S. government. U.S. government obligations
include the following types of securities:

U.S. TREASURY SECURITIES -- U.S. Treasury securities include direct
obligations of the U.S. Treasury, such as Treasury bills, notes and bonds.
For these securities, the payment of principal and interest is
unconditionally guaranteed by the U.S. government, and thus they are of the
highest possible credit quality. Such securities are subject to variations
in market value due to fluctuations in interest rates, but, if held to
maturity, will be paid in full.

FEDERAL AGENCY SECURITIES BACKED BY "FULL FAITH AND CREDIT" -- The
securities of certain U.S. government agencies and government-sponsored
entities are guaranteed as to the timely payment of principal and interest
by the full faith and credit of the U.S. government. Such agencies and
entities include the Government National Mortgage Association (Ginnie Mae),
the Veterans Administration (VA), the Federal Housing Administration (FHA),
the Export-Import Bank (Exim Bank), the Overseas Private Investment
Corporation (OPIC), the Commodity Credit Corporation (CCC) and the Small
Business Administration (SBA).

OTHER FEDERAL AGENCY OBLIGATIONS -- Additional federal agency securities are
neither direct obligations of, nor guaranteed by, the U.S. government. These
obligations include securities issued by certain U.S. government agencies and
government-sponsored entities. However, they generally involve some form of
federal sponsorship: some operate under a government charter, some are backed by
specific types of collateral; some are supported by the issuer's right to borrow
from the Treasury; and others are supported only by the credit of the issuing
government agency or entity. These agencies and entities include, but are not
limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation
(Freddie Mac), Federal National Mortgage Association (Fannie Mae), Tennessee
Valley Authority and Federal Farm Credit Bank System.

INVESTING IN VARIOUS COUNTRIES -- Investing outside the United States may
involve risks caused by, among other things, currency controls and fluctuating
currency values; different accounting, auditing, financial reporting and legal
standards and practices in some countries; changing local, regional and global
economic, political and social conditions; expropriation; changes in tax policy;
greater market volatility; differing securities market structures; higher
transaction costs; and various administrative difficulties, such as delays in
clearing and settling portfolio transactions or in receiving payment of
dividends.

The risks described above may be heightened in connection with investments in
developing countries. Although there is no universally accepted definition, the
investment adviser generally considers a developing country as a country that is
in the earlier stages of its industrialization cycle with a low per capita gross
domestic product ("GDP") and a low market capitalization to GDP ratio relative
to those in the United States and western Europe. Historically, the markets of
developing countries have been more volatile than the markets of developed
countries. The fund may invest in securities of issuers in developing countries
only to a limited extent.

Additional costs could be incurred in connection with the fund's investment
activities outside the United States. Brokerage commissions may be higher
outside the United States, and the fund will bear certain expenses in connection
with its currency transactions. Furthermore, increased custodian costs may be
associated with maintaining assets in certain jurisdictions.

AMCAP Fund -- Page 4
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INVESTING IN SMALLER CAPITALIZATION STOCKS -- The fund may invest in the stocks
of smaller capitalization companies (typically companies with market
capitalizations of less than $2.0 billion at the time of purchase). The
investment adviser believes that the issuers of smaller capitalization stocks
often provide attractive investment opportunities. However, investing in smaller
capitalization stocks can involve greater risk than is customarily associated
with investing in stocks of larger, more established companies. For example,
smaller companies often have limited product lines, limited markets or financial
resources, may be dependent for management on one or a few key persons and can
be more susceptible to losses. Also, their securities may be thinly traded (and
therefore have to be sold at a discount from current prices or sold in small
lots over an extended period of time), may be followed by fewer investment
research analysts and may be subject to wider price swings, thus creating a
greater chance of loss than securities of larger capitalization companies.

CASH AND CASH EQUIVALENTS -- These include (a) commercial paper (for example,
short-term notes with maturities typically up to 12 months in length issued by
corporations, governmental bodies or bank/corporation sponsored conduits
(asset-backed commercial paper)) (b) short-term bank obligations (for example,
certificates of deposit, bankers' acceptances (time drafts on a commercial bank
where the bank accepts an irrevocable obligation to pay at maturity)) or bank
notes, (c) savings association and savings bank obligations (for example, bank
notes and certificates of deposit issued by savings banks or savings
associations), (d) securities of the U.S. government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (e)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.

4(2) COMMERCIAL PAPER -- The fund may purchase commercial paper issued pursuant
to Section 4(2) of the Securities Act of 1933 (the "1933 Act"). 4(2) commercial
paper has substantially the same price and liquidity characteristics as
commercial paper generally, except that the resale of 4(2) commercial paper is
limited to the institutional investor marketplace. Such a restriction on resale
makes 4(2) commercial paper technically a restricted security under the 1933
Act. In practice, however, 4(2) commercial paper can be resold as easily as any
other unrestricted security held by the fund. Accordingly, 4(2) commercial paper
has been determined to be liquid under procedures adopted by the fund's board of
directors.

* * * * * *

PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the fund's objective, and changes in its investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. High portfolio turnover involves correspondingly greater
transaction costs in the form of dealer spreads or brokerage commissions, and
may result in the realization of net capital gains, which are taxable when
distributed to shareholders.

A fund's portfolio turnover rate would equal 100% if each security in the fund's
portfolio were replaced once per year. The fund's portfolio turnover rates for
the fiscal years ended February 28 or 29, 2005 and 2004 were 16% and 17%,
respectively. See "Financial highlights" in the prospectus for the fund's annual
portfolio turnover rate for each of the last five fiscal years.

AMCAP Fund -- Page 5
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FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies
and investment restrictions, which may not be changed without approval by
holders of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), as the vote of the
lesser of (a) 67% or more of the outstanding voting securities present at a
meeting, if the holders of more than 50% of the outstanding voting securities
are present in person or by proxy, or (b) more than 50% of the outstanding
voting securities. All percentage limitations are considered at the time
securities are purchased and are based on the fund's net assets unless otherwise
indicated. None of the following investment restrictions involving a maximum
percentage of assets will be considered violated unless the excess occurs
immediately after, and is caused by, an acquisition by the fund.

1. The fund may not invest in:

(a) real estate (although it has not been the practice of the fund to make such
investments, the fund may invest in the securities of real estate
investment trusts);

(b) commodities or commodity contracts;

(d) the securities of companies which, with their predecessors, have a record
of less than three years' continuing operation, if such purchase at the
time thereof would cause more than 5% of the value of the fund's total
assets to be invested in the securities of such companies;

(e) securities which would subject the fund to unlimited liability (such as
assessable shares or partnership interests);

(f) any securities of another issuer if immediately after and as a result of
such purchase (1) the market value of the securities of such other issuer
shall exceed 5% of the market value of the total assets of the fund or (2)
the fund shall own more than 10% of any class of securities or of the
outstanding voting securities of such issuer; or

(g) any securities if immediately after and as a result of such purchase more
than 25% of the market value of the total assets of the fund are invested
in securities of companies in any one industry.

2. The fund may not engage in short sales or margin purchases.

3. The fund may not lend money or securities. The making of deposits with
banks and the purchase of a portion of the issue of bonds, debentures, or other
debt securities which are publicly distributed or of a type generally purchased
by institutional investors, are not regarded as loans.

4. The fund may not invest more than 10% of the value of its total assets in
securities that are illiquid, nor may it engage in the business of underwriting
securities of other issuers.

AMCAP Fund -- Page 6
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5. The fund may not borrow in excess of 10% of its total assets taken at cost
or pledge its assets taken at market value to an extent greater than 15% of
total assets taken at cost. Asset coverage of at least 300% taken at market
value must be maintained. No borrowing may be undertaken except as a temporary
measure for extraordinary or emergency purposes. (The fund may borrow only from
banks. The fund, however, has never borrowed and does not currently anticipate
borrowing.)

Investment restriction #1 does not apply to deposits in banks or to the purchase
of securities issued or fully guaranteed by the U.S. government (or its agencies
or instrumentalities). For purposes of investment restriction #1(g), the fund
will not invest 25% or more (rather than "more than 25%") of its total assets in
the securities of issuers in the same industry.

Notwithstanding investment restriction #5, the fund has no current intention (at
least during the next 12 months) to leverage its assets.

The following policies are non-fundamental policies which may be changed by
action of the Board of Directors, without shareholder approval:

1. The fund may not invest in securities of open-end investment companies
except in connection with a merger, consolidation or acquisition of assets.
(Notwithstanding this restriction, if deemed advisable by its officers,
compensation paid by the fund to its Directors may be invested in securities of
this or other investment companies under a deferred compensation plan adopted by
Directors pursuant to an exemptive order granted by the Securities and Exchange
Commission.)

2. The fund may invest in securities of closed-end investment companies within
the limitations imposed by the 1940 Act. In general, this means that the fund
(i) will not own more than 3% of the outstanding voting stock of a closed-end
investment company, (ii) will not invest more than an aggregate of 5% of its
total assets in securities issued by closed-end investment companies, and (iii)
together with all other investment companies served by the investment adviser,
will not own more than 10% of the outstanding voting stock of a closed-end
investment company. Any such purchases will be made only in the open market or
as a part of a merger, consolidation, or acquisition of assets, and will not
involve commissions or profits to a sponsor or dealer other than customary
brokerage commissions.

3. The fund may not issue senior securities except as permitted under the 1940
Act.

AMCAP Fund -- Page 7
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MANAGEMENT OF THE FUND

BOARD OF DIRECTORS AND OFFICERS

YEAR FIRST NUMBER OF PORTFOLIOS
POSITION ELECTED WITHIN THE FUND
WITH THE A DIRECTOR PRINCIPAL OCCUPATION(S) DURING COMPLEX/2/ OVERSEEN
NAME AND AGE FUND OF THE FUND/1/ PAST FIVE YEARS BY DIRECTOR
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"NON-INTERESTED" DIRECTORS
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H. Frederick Chairman of 1998 Private investor; former President 19
Christie the Board and CEO, The Mission Group
Age: 71 (independent (non-utility holding company,
and subsidiary of Southern California
Non-Executive) Edison Company)
and Director
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Mary Anne Dolan Director 1998 Founder and President, M.A.D., Inc. 3
Age: 58 (communications company); former
Editor-in-Chief, The Los Angeles
---------------
Herald Examiner
---------------
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Martin Fenton Director 1990 Chairman of the Board, Senior 16
Age: 69 Resource Group LLC (development and
management of senior living
communities)
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Mary Myers Kauppila Director 1998 Private investor; Chairman of the 5
Age: 51 Board and CEO, Ladera Management
Co. (venture capital and
agriculture); former owner and
President, Energy Investment, Inc.
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William H. Kling Director 2006 President, American Public Media 8
Age: 64 Group
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Bailey Morris-Eck Director 1999 Director and Programming Chair, 3
Age: 60 WYPR Baltimore/Washington (public
radio station); Senior Adviser
(London), Financial News; Senior
--------------
Fellow, Institute for International
Economics
--------------------------------------------------------------------------------------------------------------------
Kirk P. Pendleton Director 1986 Chairman of the Board and CEO, 6
Age: 65 Cairnwood, Inc. (venture capital
investment)
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Olin C. Robison Director 1998 President Emeritus of the Salzburg 3
Age: 68 Seminar; President Emeritus,
Middlebury College
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Steven B. Sample Director 1999 President, University of Southern 2
Age: 64 California
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OTHER DIRECTORSHIPS/3/ HELD
NAME AND AGE BY DIRECTOR
--------------------------------------------------------
"NON-INTERESTED" DIRECTORS
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H. Frederick Ducommun Incorporated;
Christie IHOP Corporation;
Age: 71 Southwest Water Company
--------------------------------------------------------
Mary Anne Dolan None
Age: 58
--------------------------------------------------------
Martin Fenton None
Age: 69
--------------------------------------------------------
Mary Myers Kauppila None
Age: 51
--------------------------------------------------------
William H. Kling Irwin Financial Corporation
Age: 64
--------------------------------------------------------
Bailey Morris-Eck The Nevis Fund, Inc.
Age: 60
--------------------------------------------------------
Kirk P. Pendleton None
Age: 65
--------------------------------------------------------
Olin C. Robison American Shared Hospital
Age: 68 Services
--------------------------------------------------------
Steven B. Sample UNOVA, Inc.;
Age: 64 William Wrigley Jr. Company
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AMCAP Fund -- Page 8

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PRINCIPAL OCCUPATION(S) DURING
YEAR FIRST PAST FIVE YEARS AND
ELECTED POSITIONS HELD NUMBER OF PORTFOLIOS
POSITION A DIRECTOR WITH AFFILIATED ENTITIES WITHIN THE FUND
WITH THE AND/OR OFFICER OR THE PRINCIPAL UNDERWRITER COMPLEX/2/ OVERSEEN
NAME AND AGE FUND OF THE FUND/1/ OF THE FUND BY DIRECTOR
-----------------------------------------------------------------------------------------------------------------
"INTERESTED" DIRECTORS/4,5/
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R. Michael Shanahan Vice Chairman 1986 Chairman of the Board, Capital 2
Age: 66 and Director Research and Management
Company; Director, American
Funds Distributors, Inc.*;
Non-Executive Chair, The
Capital Group Companies,
Inc.*; Chairman of the Board,
Capital Management Services,
Inc.*; Director, Capital
Strategy Research, Inc.*
-----------------------------------------------------------------------------------------------------------------
Claudia P. President and 1992-1994 Senior Vice President, Capital 1
Huntington Director 1996 Research and Management
Age: 53 Company; Director, The Capital
Group Companies, Inc.*
-----------------------------------------------------------------------------------------------------------------

OTHER DIRECTORSHIPS/3/ HELD
NAME AND AGE BY DIRECTOR
------------------------------------------------------
"INTERESTED" DIRECTORS/4,5/
-------------------------------------------------------

R. Michael Shanahan None
Age: 66
------------------------------------------------------
Claudia P. None
Huntington
Age: 53
------------------------------------------------------

AMCAP Fund -- Page 9

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PRINCIPAL OCCUPATION(S) DURING
POSITION YEAR FIRST ELECTED PAST FIVE YEARS AND POSITIONS HELD
WITH THE AN OFFICER WITH AFFILIATED ENTITIES
NAME AND AGE FUND OF THE FUND/1/ OR THE PRINCIPAL UNDERWRITER OF THE FUND
-----------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS/5/
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Timothy D. Armour Senior Vice 1996 Executive Vice President and Director, Capital Research and
Age: 44 President Management Company; Director, The Capital Group Companies,
Inc.*
-----------------------------------------------------------------------------------------------------------------------------------
Paul G. Haaga, Jr. Senior Vice 1994 Executive Vice President and Director, Capital Research and
Age: 56 President Management Company; Director, The Capital Group Companies, Inc.*
-----------------------------------------------------------------------------------------------------------------------------------
Barry S. Vice President 2006 Vice President, Capital Research Company*
Crosthwaite
Age: 47
-----------------------------------------------------------------------------------------------------------------------------------
Brady L. Enright Vice President 2002 Senior Vice President, Capital Research Company*
Age: 38
-----------------------------------------------------------------------------------------------------------------------------------
Joanna F. Jonsson Vice President 1998 Senior Vice President, Capital Research Company*; Director, The
Age: 41 Capital Group Companies, Inc.*
-----------------------------------------------------------------------------------------------------------------------------------
C. Ross Sappenfield Vice President 1999 Vice President, Capital Research and Management Company; Vice
Age: 39 President, Capital Research Company*
-----------------------------------------------------------------------------------------------------------------------------------
Vincent P. Corti Secretary 1998 Vice President - Fund Business Management Group, Capital
Age: 49 Research and Management Company
-----------------------------------------------------------------------------------------------------------------------------------
Karl C. Grauman Treasurer 2006 Vice President - Fund Business Management Group, Capital
Age: 34 Research and Management Company
-----------------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Regal Assistant Treasurer 2003 Vice President - Fund Business Management Group, Capital
Age: 33 Research and Management Company
-----------------------------------------------------------------------------------------------------------------------------------

* Company affiliated with Capital Research and Management Company.
1 Directors and officers of the fund serve until their resignation, removal or
retirement.
2 Capital Research and Management Company manages the American Funds, consisting
of 29 funds. Capital Research and Management Company also manages American
Funds Insurance Series,(R) which serves as the underlying investment vehicle
for certain variable insurance contracts, and Endowments, whose shareholders
are limited to certain nonprofit organizations.
3 This includes all directorships (other than those of the American Funds) that
are held by each Director as a director of a public company or a registered
investment company.
4 "Interested persons," within the meaning of the 1940 Act, on the basis of
their affiliation with the fund's investment adviser, Capital Research and
Management Company, or affiliated entities (including the fund's principal
underwriter).
5 All of the officers listed, except Barry S. Crosthwaite and C. Ross
Sappenfield, are officers and/or Directors/Trustees of one or more of the other
funds for which Capital Research and Management Company serves as investment
adviser.

THE ADDRESS FOR ALL DIRECTORS AND OFFICERS OF THE FUND IS 333 SOUTH HOPE STREET,
55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: FUND SECRETARY.

AMCAP Fund -- Page 10

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FUND SHARES OWNED BY DIRECTORS AS OF DECEMBER 31, 2004

AGGREGATE DOLLAR RANGE/1/
OF SHARES
OWNED IN ALL FUNDS
IN THE AMERICAN FUNDS
DOLLAR RANGE/1/ OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY DIRECTOR
-------------------------------------------------------------------------------

"NON-INTERESTED" DIRECTORS
-------------------------------------------------------------------------------
H. Frederick Christie Over $100,000 Over $100,000
-------------------------------------------------------------------------------
Mary Anne Dolan Over $100,000 Over $100,000
-------------------------------------------------------------------------------
Martin Fenton Over $100,000 Over $100,000
-------------------------------------------------------------------------------
Mary Myers Kauppila $1 - $10,000 Over $100,000
-------------------------------------------------------------------------------
William H. Kling None/3/ Over $100,000
-------------------------------------------------------------------------------
Bailey Morris-Eck $1 - $10,000 Over $100,000
-------------------------------------------------------------------------------
Kirk P. Pendleton $10,001 - $50,000 Over $100,000
-------------------------------------------------------------------------------
Olin C. Robison $10,001 - $50,000 Over $100,000
-------------------------------------------------------------------------------
Steven B. Sample Over $100,000 Over $100,000
-------------------------------------------------------------------------------
"INTERESTED" DIRECTORS/2/
-------------------------------------------------------------------------------
Claudia P. Huntington Over $100,000 Over $100,000
-------------------------------------------------------------------------------
R. Michael Shanahan Over $100,000 Over $100,000
-------------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" Directors include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.
2 "Interested persons," within the meaning of the 1940 Act, on the basis of
their affiliation with the fund's investment adviser, Capital Research and
Management Company, or affiliated entities (including the fund's principal
underwriter).
3 Mr. Kling was elected Director on March 15, 2006. The dollar range of shares
owned on March 20, 2006 was $10,001 - $50,000.

DIRECTOR COMPENSATION -- No compensation is paid by the fund to any officer or
Director who is a director, officer or employee of the investment adviser or
its affiliates. The fund typically pays each Director who is not an "interested
person" within the meaning of the 1940 Act (a "Non-interested Director") an
annual fee of $14,000. If the aggregate annual fees paid to a Non-interested
Director by all funds advised by the investment adviser is less than $50,000,
that Non-interested Director would be eligible for a $50,000 alternative fee.
This alternative fee is paid by those funds for which the Non-interested
Director serves as a director on a pro-rata basis according to each fund's
relative share of the annual fees that it would typically pay. The alternative
fee reflects the significant time and labor commitment required for a director
to oversee even one fund. A Non-interested Director who is chairman of the board
(an "independent chair") also receives an additional annual fee of $25,000, paid
in equal portions by the fund and the funds whose boards and committees
typically meet jointly with those of the fund. The fund pays to its independent
chair an attendance fee (as described below) for each meeting of a committee of
the Board of Directors attended as a non voting ex-officio member.

AMCAP Fund -- Page 11
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In addition, the fund generally pays to Non-interested Directors fees of (a)
$2,500 for each Board of Directors meeting attended and (b) $1,500 for each
meeting attended as a member of a committee of the Board of Directors.

Non-interested Directors also receive attendance fees of (a) $2,500 for each
director seminar or information session organized by the investment adviser, (b)
$1,500 for each joint audit committee meeting with all other audit committees of
funds advised by the investment adviser and (c) $500 for each meeting of the
board or committee chairs of other funds advised by the investment adviser. The
fund and the other funds served by each Non-interested Director each pay an
equal portion of these attendance fees.

The Nominating Committee of the Board of Directors, a Committee comprised
exclusively of Non-interested Directors, reviews Director compensation
periodically, and typically recommends adjustments every other year. In making
its recommendations, the Nominating Committee considers a number of factors,
including operational, regulatory and other developments affecting the
complexity of the Board's oversight obligations, as well as comparative industry
data.

No pension or retirement benefits are accrued as part of fund expenses. The
Non-interested Directors may elect, on a voluntary basis, to defer all or a
portion of their fees through a deferred compensation plan in effect for the
fund. The fund also reimburses certain expenses of the Directors who are not
affiliated with the investment adviser.

AMCAP Fund -- Page 12
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DIRECTOR COMPENSATION PAID DURING THE FISCAL YEAR ENDED FEBRUARY 28, 2005

TOTAL COMPENSATION (INCLUDING
AGGREGATE COMPENSATION VOLUNTARILY DEFERRED
(INCLUDING VOLUNTARILY COMPENSATION/1/)
DEFERRED COMPENSATION/1/) FROM ALL FUNDS MANAGED BY
NAME FROM THE FUND CAPITAL RESEARCH AND MANAGEMENT
---------------------------------------------------------------------------------------------------- COMPANY OR ITS AFFILIATES/2/
--------------------------------

H. Frederick Christie/3/ $22,474 $298,415
------------------------------------------------------------------------------------------------------------------------------------
Mary Anne Dolan 25,500 121,500
------------------------------------------------------------------------------------------------------------------------------------
Martin Fenton/3/ 25,374 246,620
------------------------------------------------------------------------------------------------------------------------------------
Mary Myers Kauppila/3/ 26,000 164,500
------------------------------------------------------------------------------------------------------------------------------------
William H. Kling None/4/ 156,249
------------------------------------------------------------------------------------------------------------------------------------
Bailey Morris-Eck/3/ 26,834 121,000
------------------------------------------------------------------------------------------------------------------------------------
Kirk P. Pendleton/3/ 26,100 204,249
------------------------------------------------------------------------------------------------------------------------------------
Olin C. Robison/3/ 26,834 125,000
------------------------------------------------------------------------------------------------------------------------------------
Steven B. Sample 27,730 61,402
------------------------------------------------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible Directors under a nonqualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more American Funds
as designated by the Directors. Compensation for the fiscal year ended February
28, 2005, includes earnings on amounts deferred in previous fiscal years.
2 Capital Research and Management Company manages the American Funds, consisting
of 29 funds. Capital Research and Management Company also manages American
Funds Insurance Series,(R) which serves as the underlying investment vehicle
for certain variable insurance contracts, and Endowments, whose shareholders
are limited to certain nonprofit organizations.
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2005
fiscal year for participating Directors is as follows: H. Frederick Christie
($89,221), Martin Fenton ($179,226), Mary Myers Kauppila ($184,148), Bailey
Morris-Eck ($124,068), Kirk P. Pendleton ($293,628) and Olin C. Robison
($166,407). Amounts deferred and accumulated earnings thereon are not funded
and are general unsecured liabilities of the fund until paid to the Directors.
4 Mr. Kling was elected Director on March 15, 2006.

As of April 1, 2005, the officers and Directors of the fund and their families,
as a group, owned beneficially or of record less than 1% of the outstanding
shares of the fund.

FUND ORGANIZATION AND THE BOARD OF DIRECTORS -- The fund, an open-end,
diversified management investment company, was organized as a Delaware
corporation in 1966 and reorganized as a Maryland corporation on May 10, 1990.
Although the Board of Directors has delegated day-to-day oversight to the
investment adviser, all fund operations are supervised by the fund's Board,
which meets periodically and performs duties required by applicable state and
federal laws.

Under Maryland law, the business affairs of a fund are managed under the
direction of the Board of Directors, and all powers of the fund are exercised by
or under the authority of the Board except as reserved to the shareholders by
law or the fund's charter or by-laws. Maryland law requires each Director to
perform his/her duties as a Director, including his/her duties as a member of
any Board committee on which he/she serves, in good faith, in a manner he/she
reasonably believes to be in the best interest of the fund, and with the care
that an ordinarily prudent person in a like position would use under similar
circumstances.

AMCAP Fund -- Page 13
<PAGE>

Members of the Board who are not employed by the investment adviser or its
affiliates are paid certain fees for services rendered to the fund as described
above. They may elect to defer all or a portion of these fees through a deferred
compensation plan in effect for the fund.

The fund has several different classes of shares, including Class A, B, C, F,
529-A, 529-B, 529-C, 529-E, 529-F, R-1, R-2, R-3, R-4 and R-5 shares. The 529
share classes are available only through CollegeAmerica/(R)/ to investors
establishing qualified higher education savings accounts. The R share classes
are generally available only to employer-sponsored retirement plans. Class R-5
shares are also available to clients of the Personal Investment Management group
of Capital Guardian Trust Company who do not have an intermediary associated
with their accounts and without regard to the $1 million purchase minimum.

Shares of each class represent an interest in the same investment portfolio.
Each class has pro rata rights as to voting, redemption, dividends and
liquidation, except that each class bears different distribution expenses and
may bear different transfer agent fees and other expenses properly attributable
to the particular class as approved by the Board of Directors and set forth in
the fund's rule 18f-3 Plan. Each class' shareholders have exclusive voting
rights with respect to the respective class' rule 12b-1 plans adopted in
connection with the distribution of shares and on other matters in which the
interests of one class are different from interests in another class. Shares of
all classes of the fund vote together on matters that affect all classes in
substantially the same manner. Each class votes as a class on matters that
affect that class alone. Note that CollegeAmerica account owners are not
shareholders of the fund and, accordingly, do not have the rights of a
shareholder, such as the right to vote proxies relating to fund shares. As the
legal owner of the fund's shares, the Virginia College Savings Plan/SM/ will
vote any proxies relating to fund shares.

The fund does not hold annual meetings of shareholders. However, significant
matters that require shareholder approval, such as certain elections of Board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the fund will hold a meeting at which any member of the Board could be removed
by a majority vote.

The fund's Articles of Incorporation and by-laws as well as separate
indemnification agreements that the fund has entered into with Directors who are
not "interested persons" of the fund, provide in effect that, subject to certain
conditions, the fund will indemnify its officers and Directors against
liabilities or expenses actually and reasonably incurred by them relating to
their service to the fund. However, Directors are not protected from liability
by reason of their willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.

COMMITTEES OF THE BOARD OF DIRECTORS -- The fund has an Audit Committee
comprised of H. Frederick Christie, Martin Fenton, Bailey Morris-Eck, Kirk P.
Pendleton and Olin C. Robison, none of whom is an "interested person" of the
fund within the meaning of the 1940 Act. The Committee provides oversight
regarding the fund's accounting and financial reporting policies and practices,
its internal controls and the internal controls of the fund's principal service
providers. The Committee acts as a liaison between the fund's independent
registered public accounting firm and the full Board of Directors. Five Audit
Committee meetings were held during the 2005 fiscal year.

AMCAP Fund -- Page 14
<PAGE>

The fund has a Contracts Committee comprised of H. Frederick Christie, Mary Anne
Dolan, Martin Fenton, Mary Myers Kauppila, William H. Kling, Bailey Morris-Eck,
Kirk P. Pendleton, Olin C. Robison and Steven B. Sample, none of whom is an
"interested person" of the fund within the meaning of the 1940 Act. The
Committee's function is to request, review and consider the information deemed
necessary to evaluate the terms of certain agreements between the fund and its
investment adviser or the investment adviser's affiliates, such as the
Investment Advisory and Service Agreement, Principal Underwriting Agreement,
Administrative Services Agreement and Plans of Distribution adopted pursuant to
rule 12b-1 under the 1940 Act, that the fund may enter into, renew or continue,
and to make its recommendations to the full Board of Directors on these matters.
One Contracts Committee meeting was held during the 2005 fiscal year.

The fund has a Nominating Committee comprised of Mary Anne Dolan, Mary Myers
Kauppila and Steven B. Sample, none of whom is an "interested person" of the
fund within the meaning of the 1940 Act. The Committee periodically reviews such
issues as the Board's composition, responsibilities, committees, compensation
and other relevant issues, and recommends any appropriate changes to the full
Board of Directors. The Committee also evaluates, selects and nominates
independent Director candidates to the full Board of Directors. While the
Committee normally is able to identify from its own and other resources an ample
number of qualified candidates, it will consider shareholder suggestions of
persons to be considered as nominees to fill future vacancies on the Board. Such
suggestions must be sent in writing to the Nominating Committee of the fund,
addressed to the fund's Secretary, and must be accompanied by complete
biographical and occupational data on the prospective nominee, along with a
written consent of the prospective nominee for consideration of his or her name
by the Committee. Two Nominating Committee meetings were held during the 2005
fiscal year.

PROXY VOTING PROCEDURES AND GUIDELINES -- The fund and its investment adviser
have adopted Proxy Voting Guidelines (the "Guidelines") with respect to voting
proxies of securities held by the fund, other American Funds, Endowments and
American Funds Insurance Series. Certain American Funds have established
separate proxy committees that vote proxies or delegate to a voting officer the
authority to vote on behalf of those funds. Proxies for all other funds are
voted by a committee of the investment adviser under authority delegated by
those funds' Boards. Therefore, if more than one fund invests in the same
company, they may vote differently on the same proposal.

All U.S. proxies are voted. Non-U.S. proxies also are voted, provided there is
sufficient time and information available. After a proxy is received, the
investment adviser prepares a summary of the proposals in the proxy. A
discussion of any potential conflicts of interest is also included in the
summary. After reviewing the summary, one or more research analysts familiar
with the company and industry make a voting recommendation on the proxy
proposals. A second recommendation is made by a proxy coordinator (a senior
investment professional) based on the individual's knowledge of the Guidelines
and familiarity with proxy-related issues. The proxy summary and voting
recommendations are then sent to the appropriate proxy voting committee for the
final voting decision.

The analyst and proxy coordinator making voting recommendations are responsible
for noting any potential material conflicts of interest. One example might be
where a director of one or more American Funds is also a director of a company
whose proxy is being voted. In such instances, proxy committee members are
alerted to the potential conflict. The proxy committee may then elect to vote
the proxy or seek a third-party recommendation or vote of an ad hoc group of
committee members.

AMCAP Fund -- Page 15
<PAGE>

The Guidelines, which have been in effect in substantially their current form
for many years, provide an important framework for analysis and decision-making
by all funds. However, they are not exhaustive and do not address all potential
issues. The Guidelines provide a certain amount of flexibility so that all
relevant facts and circumstances can be considered in connection with every
vote. As a result, each proxy received is voted on a case-by-case basis
considering the specific circumstances of each proposal. The voting process
reflects the funds' understanding of the company's business, its management and
its relationship with shareholders over time.

On August 31 of each year, each fund is required to file Form N-PX containing
its complete voting record for the 12 months ended the preceding June 30. The
fund's voting record for the 12 months ended June 30, 2004 is available on the
American Funds website at americanfunds.com and on the SEC's website at
www.sec.gov.

The following summary sets forth the general positions of the American Funds,
Endowments, American Funds Insurance Series and the investment adviser on
various proposals. A copy of the full Guidelines is available upon request, free
of charge, by calling American Funds Service Company at 800/421-0180 or visiting
the American Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director is generally supported. Votes may be withheld for some or all of
the nominees if this is determined to be in the best interest of
shareholders. Separation of the chairman and CEO positions may also be
supported. Typically, proposals to declassify the board (elect all
directors annually) are supported based on the belief that this increases
the directors' sense of accountability to shareholders.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill, to
provide for confidential voting and to provide for cumulative voting are
usually supported. Proposals to eliminate the right of shareholders to act
by written consent or to take away a shareholder's right to call a special
meeting are not typically supported.

COMPENSATION AND BENEFIT PLANS -- Option plans are complicated, and many
factors are considered in evaluating a plan. Each plan is evaluated based
on protecting shareholder interests and a knowledge of the company and its
management. Considerations include the pricing (or repricing) of options
awarded under the plan and the impact of dilution on existing shareholders
from past and future equity awards. Compensation packages should be
structured to attract, motivate and retain existing employees and qualified
directors; however, they should not be excessive.

ROUTINE MATTERS -- The ratification of auditors, procedural matters
relating to the annual meeting and changes to company name are examples of
items considered routine. Such items are generally voted in favor of
management's recommendations unless circumstances indicate otherwise.

PRINCIPAL FUND SHAREHOLDERS -- The following table identifies those investors
who own of record or are known by the fund to own beneficially 5% or more of any
class of its shares as of the opening of business on April 1, 2005. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

AMCAP Fund -- Page 16
<PAGE>

NAME AND ADDRESS OWNERSHIP PERCENTAGE
----------------------------------------------------------------------------

Edward D. Jones & Co. Class A 14.61%
201 Progress Parkway Class B 5.89
Maryland Heights, MO 63043-3009
----------------------------------------------------------------------------
MLPF&S For the Sole Benefit of Its Customers Class C 17.63
4800 Deer Lake Drive East, Floor 2 Class R-3 10.28
Jacksonville, FL 32246-6484
----------------------------------------------------------------------------
Citigroup Global Markets, Inc. Class C 7.85
333 W. 34th Street
New York, NY 10001-2402
----------------------------------------------------------------------------
Dean Witter Reynolds Class C 6.58
3 Harborside Plaza, 6th Floor
Jersey City, NJ 07311-3907
----------------------------------------------------------------------------
Charles Schwab & Co., Inc. Class F 12.75
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
Nationwide Trust Company FSB Class R-3 6.69
P.O. Box 182029
Columbus, OH 43218-2029
----------------------------------------------------------------------------
Transamerica Life Insurance & Annuity Co. 401K Class R-3 6.20
P.O. Box 30368
Los Angeles, CA 90030-0368
----------------------------------------------------------------------------
Chase Manhattan Bank NA TTEE Class R-4 12.06
Ethan Allen 401K EE SVGS PL & TR
P.O. Box 419784
Kansas City, MO 64141-6784
----------------------------------------------------------------------------
T. Rowe Price TTEE Class R-4 7.67
Centurytel, Inc. 401K
4515 Painters Mill Road
Owings Mills, MD 21117-4903
----------------------------------------------------------------------------
Fidelity Investments Institutional Operations Co. Class R-5 26.11
100 Magellan Way, KWIC
Covington, KY 41015-1999
----------------------------------------------------------------------------
MAC & Co. Class R-5 25.80
Boehringer Ingelheim Corp. 401K
P.O. Box 3198
Pittsburgh, PA 15230-3198
----------------------------------------------------------------------------
Capital Group Master Retirement Plan Class R-5 10.98
c/o Capital Guardian Trust Company
333 S. Hope Street, Floor 49
Los Angeles, CA 90071
----------------------------------------------------------------------------

AMCAP Fund -- Page 17
<PAGE>

INVESTMENT ADVISER -- Capital Research and Management Company, the investment
adviser, founded in 1931, maintains research facilities in the United States and
abroad (Los Angeles, San Francisco, New York, Washington, DC, London, Geneva,
Hong Kong, Singapore and Tokyo). These facilities are staffed with experienced
investment professionals. The investment adviser is located at 333 South Hope
Street, Los Angeles, CA 90071 and 135 South State College Boulevard, Brea, CA
92821. It is a wholly owned subsidiary of The Capital Group Companies, Inc., a
holding company for several investment management subsidiaries. The investment
adviser manages equity assets for the American Funds through two divisions.
These divisions generally function separately from each other with respect to
investment research activities and they make investment decisions for the funds
on a separate basis.

POTENTIAL CONFLICTS OF INTEREST -- The investment adviser has adopted policies
and procedures that address potential conflicts of interest that may arise
between a portfolio counselor's management of the fund and his or her management
of other funds and accounts, such as conflicts relating to the allocation of
investment opportunities, personal investing activities, portfolio counselor
compensation and proxy voting of portfolio securities. While there is no
guarantee that such policies and procedures will be effective in all cases, the
investment adviser believes that all issues relating to potential material
conflicts of interest involving the fund and its other managed funds and
accounts have been addressed.

COMPENSATION OF INVESTMENT PROFESSIONALS -- As described in the prospectus, the
investment adviser uses a system of multiple portfolio counselors in managing
fund assets. In addition, Capital Research and Management Company's investment
analysts may make investment decisions with respect to a portion of a fund's
portfolio within their research coverage. Portfolio counselors and investment
analysts may manage assets in other mutual funds advised by Capital Research and
Management Company. Portfolio counselors and investment analysts are paid
competitive salaries by Capital Research and Management Company. In addition,
they may receive bonuses based on their individual portfolio results. Investment
professionals also may participate in profit-sharing plans. The relative mix of
compensation represented by bonuses, salary and profit-sharing will vary
depending on the individual's portfolio results, contributions to the
organization and other factors. In order to encourage a long-term focus, bonuses
based on investment results are calculated by comparing pretax total returns to
relevant benchmarks over both the most recent year and a four-year rolling
average, with the greatest weight placed on the four-year rolling average. For
portfolio counselors, benchmarks may include measures of the marketplaces in
which the relevant fund invests and measures of the results of comparable mutual
funds. For investment analysts, benchmarks may include relevant market measures
and appropriate industry or sector indexes reflecting their areas of expertise.
Capital Research and Management Company also separately compensates analysts for
the quality of their research efforts. The benchmarks against which AMCAP Fund
portfolio counselors are measured include: S&P 500 and Lipper Growth Funds Index
(adjusted).

PORTFOLIO COUNSELOR FUND HOLDINGS AND OTHER MANAGED ACCOUNTS -- As described
below, portfolio counselors may personally own shares of the fund. In addition,
portfolio counselors may manage a portion of other mutual funds or accounts
advised by Capital Research and Management Company or its affiliates.

AMCAP Fund -- Page 18
<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF FEBRUARY 28, 2005:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) THAT
THAT THAT PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR MANAGES
OF FUND MANAGES MANAGES (ASSETS OF
PORTFOLIO SHARES (ASSETS OF RICS (ASSETS OF PIVS OTHER ACCOUNTS
COUNSELOR OWNED/1/ IN BILLIONS)/2/ IN BILLIONS) IN BILLIONS)/3/
-----------------------------------------------------------------------------------------------

R. Michael Shanahan Over 3 $189.9/4/ None None
$1,000,000
------------------------------------------------------------------------------------------------
Claudia P. $500,001 -- 4 $75.8/4/ 1 $0.010/5/ None
Huntington $1,000,000
------------------------------------------------------------------------------------------------
Timothy D. Armour $500,001 -- 3 $139.0/4/ 1 $0.010/5/ None
$1,000,000
------------------------------------------------------------------------------------------------
Brady L. Enright $1 -- None None None
$10,000
------------------------------------------------------------------------------------------------
C. Ross Sappenfield $100,001 -- 3 $171.5/4/ None None
$500,000
------------------------------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; $100,001 - $500,000; $500,001 -
$1,000,000; and Over $1,000,000. The amounts listed include shares owned
through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
2 Indicates fund(s) where the Portfolio Counselor also has significant
responsibilities for the day to day management of the fund(s).
3 Reflects other professionally managed accounts held at companies affiliated
with Capital Research and Management Company. Personal brokerage accounts of
portfolio counselors and their families are not reflected.
4 Assets noted are the total net assets of the registered investment companies
and are not indicative of the total assets managed by the individual, which is
a substantially lower amount.
5 Represents a fund sub-advised by Capital Research and Management Company and
sold in Canada. Assets noted represent the total net assets of the fund and are
not indicative of the total assets managed by the individual, which will be a
substantially lower amount.
INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the investment adviser will
continue in effect until March 31, 2007, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (a) the Board of Directors, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (b) the vote of a majority of Directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the investment adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party, and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).

AMCAP Fund -- Page 19
<PAGE>

In considering the renewal of the Agreement each year, the Contracts Committee
of the Board of Directors evaluates information provided by the investment
adviser in accordance with Section 15(c) of the 1940 Act and presents its
recommendations to the full Board of Directors. That information typically
relates to: the nature, extent and quality of the investment adviser's services;
the fund's investment results on an absolute basis and as compared with various
indices and peer funds; the fund's advisory fee and other expenses on absolute
basis and as compared with various indices and peer funds, as well as other
funds advised by the investment adviser; financial information concerning the
investment adviser, including profitability comparisons with certain
publicly-held mutual fund managers; information with respect to the sharing of
economies of scale; compliance and regulatory matters; fees charged by the
investment adviser's affiliates to institutional clients; and investment adviser
compliance, regulatory and personnel matters. In preparation for its most recent
meeting, the Committee reviewered such information in advance. At the meeting,
the members of the Committee discussed the information with representatives of
the investment adviser, posed questions, requested additional information
concerning various matters and consulted in executive session with independent
counsel to the fund's independent directors.

In recommending the Agreement's renewal for the current period, the Committee
gave consideration to a wide variety of factors, including, among others, the
fund's historical investment results both on an absolute basis and relative to
select peer groups; the fund's relatively low advisory fees and total expense
ratio (both measured as a percentage of the fund's net assets) in comparison
with peer funds; and the experience and quality of the investment adviser and
its advisory and administrative personnel who render services to the fund. Based
on their consideration of these and other matters, the Committee and the Board
concluded that the advisory fees and other expenses of the fund are fair and
that shareholders have received reasonable value in return for paying such fees
and expenses.

In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. The fund pays all expenses not assumed by the investment
adviser, including, but not limited to, custodian, stock transfer and dividend
disbursing fees and expenses; shareholder recordkeeping and administrative
expenses; costs of the designing, printing and mailing of reports, prospectuses,
proxy statements and notices to its shareholders; taxes; expenses of the
issuance and redemption of fund shares (including stock certificates,
registration and qualification fees and expenses); expenses pursuant to the
fund's plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to Directors unaffiliated with the
investment adviser; association dues; costs of stationery and forms prepared
exclusively for the fund; and costs of assembling and storing shareholder
account data.

AMCAP Fund -- Page 20
<PAGE>

The Agreement provides for monthly fees, accrued daily, based on the following
annual rates and net asset levels:

Net asset level

RATE IN EXCESS OF UP TO
------------------------------------------------------------------------------

0.485% $ 0 $ 1 billion
------------------------------------------------------------------------------
0.385 1 billion 2 billion
------------------------------------------------------------------------------
0.355 2 billion 3 billion
------------------------------------------------------------------------------
0.335 3 billion 5 billion
------------------------------------------------------------------------------
0.32 5 billion 8 billion
------------------------------------------------------------------------------
0.31 8 billion 13 billion
------------------------------------------------------------------------------
0.30 13 billion 21 billion
------------------------------------------------------------------------------
0.295 21 billion 27 billion
------------------------------------------------------------------------------
0.29 27 billion
------------------------------------------------------------------------------

The Agreement provides for a management fee reduction to the extent that the
annual ordinary operating expenses of the fund's Class A shares exceed 1% of the
fund's average net assets. Expenses which are not subject to these limitations
are interest, taxes and extraordinary expenses. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. To the extent the fund's management fee must be waived due to Class
A share expense ratios exceeding the expense limitations described above,
management fees will be reduced similarly for all classes of shares of the fund,
or other Class A fees will be waived in lieu of management fees.

For the fiscal year ended February 28, 2005, the investment adviser was entitled
to receive from the fund management fees of $53,852,000. As a result of the
management fee waiver described below, for the year ended February 28, 2005, the
fee shown on the accompanying financial statements of $53,852,000 was reduced by
$1,419,000 to $52,433,000. For the fiscal years ended February 29 and 28, 2004
and 2003, management fees paid by the fund amounted to $37,447,000 and
$27,649,000, respectively.

For the period from September 1, 2004 until March 31, 2005, the investment
adviser agreed to waive 5% of the management fees that it was otherwise entitled
to receive under the Agreement. Beginning April 1, 2005, this waiver increased
to 10% of the management fees that it is otherwise entitled to receive and will
continue at this level until further review. As a result of this waiver,
management fees will be reduced similarly for all classes of shares of the fund.

ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the investment adviser relating
to the fund's Class C, F, R and 529 shares will continue in effect until March
31, 2007, unless sooner terminated, and may be renewed from year to year
thereafter, provided that any such renewal has been specifically approved at
least annually by the vote of a majority of Directors who are not

AMCAP Fund -- Page 21
<PAGE>

parties to the Administrative Agreement or interested persons (as defined in the
1940 Act) of any such party, cast in person at a meeting called for the purpose
of voting on such approval. The fund may terminate the Administrative Agreement
at any time by vote of a majority of Directors who are not interested persons of
the fund. The investment adviser has the right to terminate the Administrative
Agreement upon 60 days' written notice to the fund. The Administrative Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).

Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares, and all Class R and 529 shares. The investment adviser contracts
with third parties, including American Funds Service Company, the fund's
Transfer Agent, to provide these services. Services include, but are not limited
to, shareholder account maintenance, transaction processing, tax information
reporting and shareholder and fund communications. In addition, the investment
adviser monitors, coordinates and oversees the activities performed by third
parties providing such services. For Class R-1 and R-2 shares, the investment
adviser has agreed to pay a portion of these fees. For the year ended February
28, 2005, the total fees paid by the investment adviser were $387,000.

As compensation for its services, the investment adviser receives transfer agent
fees for transfer agent services provided to the fund's applicable share
classes. Transfer agent fees are paid monthly according to a fee schedule
contained in a Shareholder Services Agreement between the fund and American
Funds Service Company. The investment adviser also receives an administrative
services fee for administrative services provided to the fund's applicable share
classes. Administrative services fees are paid monthly, accrued daily and
calculated at the annual rate of 0.15% of the average daily net assets for each
applicable share class, except Class R-5 shares. For Class R-5 shares, the
administrative services fee is paid monthly, accrued daily and calculated at the
annual rate of 0.10% of the average net assets of Class R-5 shares.

During the 2005 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

ADMINISTRATIVE SERVICES FEE
------------------------------------------------------------------------------

CLASS C $1,870,000
------------------------------------------------------------------------------
CLASS F 1,964,000
------------------------------------------------------------------------------
CLASS 529-A 285,000
------------------------------------------------------------------------------
CLASS 529-B 94,000
------------------------------------------------------------------------------
CLASS 529-C 116,000
------------------------------------------------------------------------------
CLASS 529-E 18,000
------------------------------------------------------------------------------
CLASS 529-F 8,000
------------------------------------------------------------------------------
CLASS R-1 37,000
------------------------------------------------------------------------------
CLASS R-2 1,146,000
------------------------------------------------------------------------------
CLASS R-3 674,000
------------------------------------------------------------------------------
CLASS R-4 175,000
------------------------------------------------------------------------------
CLASS R-5 176,000
------------------------------------------------------------------------------

AMCAP Fund -- Page 22
<PAGE>

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of the fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071; 135 South State College Boulevard, Brea, CA 92821; 3500
Wiseman Boulevard, San Antonio, TX 78251; 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240; and 5300 Robin Hood Road, Norfolk, VA 23513.

The Principal Underwriter receives revenues from sales of the fund's shares. For
Class A and 529-A shares, the Principal Underwriter receives commission revenue
consisting of that portion of the Class A and 529-A sales charge remaining after
the allowances by the Principal Underwriter to investment dealers. For Class B
and 529-B shares, the Principal Underwriter sells the rights to the 12b-1 fees
paid by the fund for distribution expenses to a third party and receives the
revenue remaining after compensating investment dealers for sales of Class B and
529-B shares. The fund also pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers of Class B and 529-B shares.
For Class C and 529-C shares, the Principal Underwriter receives any contingent
deferred sales charges that apply during the first year after purchase. The fund
pays the Principal Underwriter for advancing the immediate service fees and
commissions paid to qualified dealers of Class C and 529-C shares. For Class
529-E shares, the fund pays the Principal Underwriter for advancing the
immediate service fees and commissions paid to qualified dealers. For Class F
and 529-F shares, the fund pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers and advisers who sell Class F
and 529-F shares. For Class R-1, R-2, R-3 and R-4 shares, the fund pays the
Principal Underwriter for advancing the immediate service fees paid to qualified
dealers and advisers who sell Class R-1, R-2, R-3 and R-4 shares.

Commissions, revenue or service fees retained by the Principal Underwriter after
allowances or compensation to dealers were:

COMMISSIONS, ALLOWANCE OR

REVENUE COMPENSATION

FISCAL YEAR/PERIOD OR FEES RETAINED TO DEALERS
-----------------------------------------------------------------------------------------------------

CLASS A 2005 $12,496,000 $56,126,000
2004 8,601,000 39,346,000
2003 4,196,000 19,764,000
CLASS B 2005 1,418,000 10,267,000
2004 1,406,000 11,840,000
2003 1,499,000 7,739,000
-----------------------------------------------------------------------------------------------------
CLASS C 2005 360,000 4,802,000
2004 -- 4,536,000
2003 -- 2,223,000
-----------------------------------------------------------------------------------------------------
CLASS 529-A 2005 573,000 2,717,000
2004 413,000 1,988,000
2003 246,000 1,185,000
-----------------------------------------------------------------------------------------------------
CLASS 529-B 2005 125,000 704,000
2004 119,000 729,000
2003 77,000 540,000
-----------------------------------------------------------------------------------------------------
CLASS 529-C 2005 5,000 290,000
2004 -- 239,000
2003 -- 161,000
-----------------------------------------------------------------------------------------------------

AMCAP Fund -- Page 23
<PAGE>

The fund has adopted plans of distribution (the "Plans") pursuant to rule 12b-1
under the 1940 Act. The Principal Underwriter receives amounts payable pursuant
to the Plans (see below). As required by rule 12b-1 and the 1940 Act, the Plans
(together with the Principal Underwriting Agreement) have been approved by the
full board of Directors and separately by a majority of the Directors who are
not "interested persons" of the fund and who have no direct or indirect
financial interest in the operation of the Plans or the Principal Underwriting
Agreement. Potential benefits of the Plans to the fund include quality
shareholder services; savings to the fund in transfer agency costs; benefits to
the investment process from growth or stability of assets; and maintenance of a
financially healthy management organization. The selection and nomination of
Directors who are not "interested persons" of the fund are committed to the
discretion of the Directors who are not "interested persons" during the
existence of the Plans. The Plans may not be amended to increase materially the
amount spent for distribution without shareholder approval. Plan expenses are
reviewed quarterly and the Plans must be renewed annually by the Board of
Directors.

Under the Plans, the fund may annually expend the following amounts to finance
any activity primarily intended to result in the sale of fund shares, provided
the fund's Board of Directors has approved the category of expenses for which
payment is being made: (a) for Class A shares, up to 0.25% of the average daily
net assets attributable to Class A shares; (b) for Class 529-A shares, up to
0.50% of the average daily net assets attributable to Class 529-A shares; (c)
for Class B and 529-B shares, 1.00% of the average daily net assets attributable
to Class B and 529-B shares, respectively; (d) for Class C and 529-C shares,
1.00% of the average daily net assets attributable to Class C and 529-C shares,
respectively; (e) for Class 529-E shares, up to 0.75% of the average daily net
assets attributable to Class 529-E shares; (f) for Class F and 529-F shares,

AMCAP Fund -- Page 24
<PAGE>

up to 0.50% of the average daily net assets attributable to Class F and 529-F
shares; (g) for Class R-1 shares, 1.00% of the average daily net assets
attributable to Class R-1 shares; (h) for Class R-2 shares, up to 1.00% of the
average daily net assets attributable to Class R-2 shares; (i) for Class R-3
shares, up to 0.75% of the average daily net assets attributable to Class R-3
shares; and (j) for Class R-4 shares, up to 0.50% of its average daily net
assets attributable to Class R-4 shares. The fund has not adopted a Plan for
Class R-5 shares; accordingly, no 12b-1 fees are paid from Class R-5 share
assets.

For Class A and 529-A shares: (a) up to 0.25% is reimbursed to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to the amount allowable under the fund's Class
A and 529-A 12b-1 limit is reimbursed to the Principal Underwriter for paying
distribution-related expenses, including for Class A and 529-A shares dealer
commissions and wholesaler compensation paid on sales of shares of $1 million or
more purchased without a sales charge (including purchases by employer-sponsored
defined contribution-type retirement plans investing $1 million or more or with
100 or more eligible employees, and retirement plans, endowments and foundations
with $50 million or more in assets -- "no load purchases"). Commissions on no
load purchases of Class A and 529-A shares, in excess of the Class A and 529-A
plan limitations not reimbursed to the Principal Underwriter during the most
recent fiscal quarter are recoverable for five quarters, provided that such
commissions do not exceed the annual expense limit. After five quarters, these
commissions are not recoverable.

For Class B and 529-B shares: (a) 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers, and (b) 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including the financing of commissions paid to
qualified dealers.

For Class C and 529-C shares: (a) 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers, and (b) 0.75% is paid to the Principal Underwriter for paying
distribution-related expenses, including commissions paid to qualified dealers.

For Class 529-E shares: currently (a) 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers, and (b) 0.25% is paid to the Principal Underwriter for paying
distribution-related expenses, including commissions paid to qualified dealers.

For Class F and 529-F shares: currently 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers or advisers.

For Class R-1 shares: (a) 0.25% is paid to the Principal Underwriter for paying
service-related expenses, including paying service fees to qualified dealers,
and (b) 0.75% is paid to the Principal Underwriter for distribution-related
expenses, including commissions paid to qualified dealers.

For Class R-2 shares: currently (a) 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers, and (b) 0.50% is paid to the Principal Underwriter for paying
distribution-related expenses, including commissions paid to qualified dealers.

AMCAP Fund -- Page 25
<PAGE>

For Class R-3 shares: currently (a) 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers, and (b) 0.25% is paid to the Principal Underwriter for paying
distribution-related expenses, including commissions paid to qualified dealers.

For Class R-4 shares: currently 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers or advisers.

During the 2005 fiscal year, 12b-1 expenses accrued and paid, and if applicable,
unpaid, were:

12B-1 LIABILITY
12B-1 EXPENSES OUTSTANDING
------------------------------------------------------------------------------

CLASS A $27,143,000 $5,092,000
------------------------------------------------------------------------------
CLASS B 8,678,000 1,016,000
------------------------------------------------------------------------------
CLASS C 10,533,000 1,976,000
------------------------------------------------------------------------------
CLASS F 3,035,000 805,000
------------------------------------------------------------------------------
CLASS 529-A 248,000 66,000
------------------------------------------------------------------------------
CLASS 529-B 459,000 57,000
------------------------------------------------------------------------------
CLASS 529-C 601,000 129,000
------------------------------------------------------------------------------
CLASS 529-E 53,000 15,000
------------------------------------------------------------------------------
CLASS 529-F 11,000 3,000
------------------------------------------------------------------------------
CLASS R-1 168,000 53,000
------------------------------------------------------------------------------
CLASS R-2 1,372,000 406,000
------------------------------------------------------------------------------
CLASS R-3 1,463,000 420,000
------------------------------------------------------------------------------
CLASS R-4 276,000 73,000
------------------------------------------------------------------------------

OTHER COMPENSATION TO DEALERS -- As of January 2006, the top dealers that
American Funds Distributors anticipates will receive additional compensation
(as described in the prospectus) include:

A. G. Edwards & Sons, Inc.
AIG Advisors Group
American General Securities Inc.
Ameritas Investment Corp.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Capital Analysts, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Deutsche Bank Securities Inc.
Edward Jones
Ferris, Baker Watts, Inc.
Genworth Financial Securities Corp.
Hefren-Tillotson, Inc.
Hornor, Townsend & Kent, Inc.
ING Advisors Network Inc.
InterSecurities, Inc./Transamerica Financial Advisors, Inc.
Investacorp, Inc.
Janney Montgomery Scott LLC
Jefferson Pilot Securities Corporation
JJB Hilliard, WL Lyons, Inc./PNC Bank
Legg Mason Wood Walker, Inc.
Lincoln Financial Advisors Corporation
McDonald Investments Inc./Society National Bank
Merrill Lynch, Pierce, Fenner & Smith Inc.
Metlife Enterprises
MML Investors Services, Inc.
Morgan Keegan & Company, Inc.
Morgan Stanley DW
NatCity Investment, Inc.
National Planning Holdings Inc.
NFP Securities, Inc.
Northwestern Mutual Investment Services, LLC.
Pacific Select Distributors Inc.
Park Avenue Securities LLC
Piper Jaffray & Co.
Princor Financial Services
ProEquities, Inc.
Raymond James Financial Services/Raymond James & Associates
RBC Dain Rauscher Inc.
Robert W. Baird & Co. Inc.
Securian Financial Services/C.R.I. Securities Inc.
Securities Service Network Inc.
Signator Investors, Inc.
Smith Barney
Stifel, Nicolaus & Company, Inc.
The O.N. Equity Sales Company
UBS Financial Services Inc.
US Bancorp Investments, Inc.
Wachovia Securities

AMCAP Fund -- Page 26
<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

As described in the prospectus, the investment adviser places orders with
broker-dealers for the fund's portfolio transactions. Portfolio transactions for
the fund may be executed as part of concurrent authorizations to purchase or
sell the same security for other funds served by the investment adviser, or for
trusts or other accounts served by affiliated companies of the investment
adviser. When such concurrent authorizations occur, the objective is to allocate
the executions in an equitable manner.

AMCAP Fund -- Page 27
<PAGE>

Brokerage commissions paid on portfolio transactions, including investment
dealer concessions on underwritings, if applicable, for the fiscal years ended
February 28 or 29, 2005, 2004 and 2003 amounted to $6,710,000, $7,780,000 and
$7,880,000. With respect to fixed-income securities, brokerage commissions
include explicit investment dealer concessions and may exclude other transaction
costs which may be reflected in the spread between the bid and asked price. The
decrease in the amount of brokerage commissions paid between 2004 and 2005 was
primarily due to the decrease in the commissions charged on the portfolio
transactions.

The fund is required to disclose information regarding investments in the
securities of its "regular" broker-dealers (or parent companies of its regular
broker-dealers) that derive more than 15% of their revenue from broker-dealer,
underwriter or investment adviser activities. A regular broker-dealer is (a) one
of the 10 broker-dealers that received from the fund the largest amount of
brokerage commissions by participating, directly or indirectly, in the fund's
portfolio transactions during the fund's most recent fiscal year; (b) one of the
10 broker-dealers that engaged as principal in the largest dollar amount of
portfolio transactions of the fund during the fund's most recent fiscal year; or
(c) one of the 10 broker-dealers that sold the largest amount of securities of
the fund during the fund's most recent fiscal year.

At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Banc of America Securities, LLC and J.P. Morgan
Securities Inc. As of the fund's fiscal year-end, the fund held debt securities
of Bank of America Corp. in the amount of $149,576,000 and JP Morgan Chase & Co.
in the amount of $49,963,000.

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and procedures have been reviewed by the fund's Board
of Directors and compliance will be periodically assessed by the Board in
connection with reporting from the fund's Chief Compliance Officer.

Under these policies and procedures, the fund's complete list of portfolio
holdings available for public disclosure, dated as of the end of each calendar
quarter, is permitted to be posted on the American Funds website no earlier than
the tenth day after such calendar quarter. In addition, the fund's list of top
10 equity portfolio holdings measured by percentage of net assets invested,
dated as of the end of each calendar month, is permitted to be posted on the
American Funds website no earlier than the tenth day after such month. Such
portfolio holdings information may then be disclosed to any person pursuant to
an ongoing arrangement to disclose portfolio holdings information to such person
no earlier than one day after the day on which the information is posted on the
American Funds website. Affiliates of the fund (including the fund's Board
members and officers, and certain personnel of the fund's investment adviser and
its affiliates) and certain service providers (such as the fund's custodian and
outside counsel) who require such information for legitimate business and fund
oversight purposes may receive such information earlier.

Affiliated persons of the fund as described above who receive portfolio holdings
information are subject to restrictions and limitations on the use and handling
of such information pursuant to a Code of Ethics, including requirements to
maintain the confidentiality of such information, preclear securities trades and
report securities transactions activity, as applicable. Third party service
providers of the fund receiving such information are subject to confidentiality
obligations.

AMCAP Fund -- Page 28
<PAGE>

When portfolio holdings information is disclosed other than through the American
Funds website to persons not affiliated with the fund (which, as described
above, would typically occur no earlier than one day after the day on which the
information is posted on the American Funds website), such persons may be bound
by agreements (including confidentiality agreements) that restrict and limit
their use of the information to legitimate business uses only. Neither the fund
nor its investment adviser or any affiliate thereof receives compensation or
other consideration in connection with the disclosure of information about
portfolio securities.

The authority to disclose a fund's portfolio holdings, and to establish policies
with respect to such disclosure, resides with the Investment Committee of the
fund's investment adviser. In exercising its authority, the Investment Committee
determines whether disclosure of information about the fund's portfolio
securities is appropriate and in the best interest of fund shareholders. The
investment adviser has implemented policies and procedures to address conflicts
of interest that may arise from the disclosure of fund holdings. For example,
the Code of Ethics specifically requires, among other things, the safeguarding
of information about fund holdings and contains prohibitions designed to prevent
the personal use of confidential, proprietary investment information in a way
that would conflict with fund transactions. In addition, the investment adviser
believes that its current policy of not selling portfolio holdings information
and not disclosing such information to unaffiliated third parties (other than to
fund service providers for legitimate business and fund oversight purposes)
until such holdings have been made public on the American Funds website, helps
reduce potential conflicts of interest between fund shareholders and the
investment adviser and its affiliates.

PRICE OF SHARES

Shares are purchased at the offering price or sold at the net asset value price
next determined after the purchase or sell order is received and accepted by the
fund or the Transfer Agent; the offering or net asset value price is effective
for orders received prior to the time of determination of the net asset value
and, in the case of orders placed with dealers or their authorized designees,
accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of
their designees. In the case of orders sent directly to the fund or the Transfer
Agent, an investment dealer MUST be indicated. The dealer is responsible for
promptly transmitting purchase and sell orders to the Principal Underwriter.

Orders received by the investment dealer or authorized designee, the Transfer
Agent or the fund after the time of the determination of the net asset value
will be entered at the next calculated offering price. Note that investment
dealers or other intermediaries may have their own rules about share
transactions and may have earlier cut-off times than those of the fund. For more
information about how to purchase through your intermediary, contact your
intermediary directly.

Prices that appear in the newspaper do not always indicate prices at which you
will be purchasing and redeeming shares of the fund, since such prices generally
reflect the previous day's closing price, while purchases and redemptions are
made at the next calculated price. The price you pay for shares, the offering
price, is based on the net asset value per share, which is calculated once daily
as of approximately 4:00 p.m. New York time, which is the normal close of
trading on the New York Stock Exchange, each day the Exchange is open. If, for
example, the Exchange closes at 1:00 p.m., the fund's share price would still be
determined as of 4:00 p.m. New York time. The New York Stock Exchange is
currently closed on weekends and on the following holidays: New Year's Day;
Martin Luther King, Jr. Day; Presidents' Day; Good Friday;

AMCAP Fund -- Page 29
<PAGE>

Memorial Day; Independence Day; Labor Day; Thanksgiving; and Christmas Day. Each
share class of the fund has a separately calculated net asset value (and share
price).

All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset values per
share for each share class are determined, as follows:

1. Equity securities, including depositary receipts, are valued at the official
closing price of, or the last reported sale price on, the exchange or market on
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Prices for each security are taken from the principal exchange or market
in which the security trades. Fixed-income securities are valued at prices
obtained from an independent pricing service, when such prices are available;
however, in circumstances where the investment adviser deems it appropriate to
do so, such securities will be valued at the mean quoted bid and asked prices
(or bid prices, if asked prices are not available) or at prices for securities
of comparable maturity, quality and type. The pricing services base bond prices
on, among other things, an evaluation of the yield curve as of approximately
3:00 p.m. New York time. The fund's investment adviser performs certain checks
on these prices prior to the fund's net asset value being calculated.

Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded principally among fixed-income dealers, are
valued in the manner described above for either equity or fixed-income
securities, depending on which method is deemed most appropriate by the
investment adviser.

Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity, or if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean of
representative quoted bid and asked prices.

Assets or liabilities initially expressed in terms of non-U.S. currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.

Securities and assets for which market quotations are not readily available or
are considered unreliable are valued at fair value as determined in good faith
under policies approved by the fund's Board. Subject to Board oversight, the
fund's Board has delegated the obligation to make fair valuation determinations
to a Valuation Committee established by the fund's investment adviser. The Board
receives regular reports describing fair-valued securities and the valuation
methods used.

The Valuation Committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to ensure that certain basic principles and factors are
considered when making all fair value determinations. As a general principle,
securities lacking readily available market quotations, or that have quotations
that are considered unreliable, are valued in good faith by the Valuation
Committee based upon what the fund might reasonably expect to receive upon their
current sale. The Valuation Committee considers all indications of value
available to it in determining the fair value to be assigned to a particular
security, including, without limitation, the type and cost of the security,
contractual or legal restrictions on resale of the security, relevant

AMCAP Fund -- Page 30
<PAGE>

financial or business developments of the issuer, actively traded similar or
related securities, conversion or exchange rights on the security, related
corporate actions, significant events occurring after the close of trading in
the security and changes in overall market conditions.

2. Each class of shares represents interests in the same portfolio of
investments and is identical in all respects to each other class, except for
differences relating to distribution, service and other charges and expenses,
certain voting rights, differences relating to eligible investors, the
designation of each class of shares, conversion features and exchange
privileges. Expenses attributable to the fund, but not to a particular class of
shares, are borne by each class pro rata based on relative aggregate net assets
of the classes. Expenses directly attributable to a class of shares are borne by
that class of shares. Liabilities, including accruals of taxes and other expense
items attributable to particular share classes, are deducted from total assets
attributable to such share classes.

3. Net assets so obtained for each share class are then divided by the total
number of shares outstanding of that share class, and the result, rounded to the
nearer cent, is the net asset value per share for that share class.

TAXES AND DISTRIBUTIONS

FUND TAXATION -- The fund has elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code (the "Code"). A
regulated investment company qualifying under Subchapter M of the Code is
required to distribute to its shareholders at least 90% of its investment
company taxable income (including the excess of net short-term capital gain over
net long-term capital losses) and generally is not subject to federal income tax
to the extent that it distributes annually 100% of its investment company
taxable income and net realized capital gains in the manner required under the
Code. The fund intends to distribute annually all of its investment company
taxable income and net realized capital gains and therefore does not expect to
pay federal income tax, although in certain circumstances, the fund may
determine that it is in the interest of shareholders to distribute less than
that amount.

To be treated as a regulated investment company under Subchapter M of the Code,
the fund must also (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of securities or foreign currencies, or other income
(including, but not limited to, gains from options, futures or forward
contracts) derived with respect to the business of investing in such securities
or currencies, and (b) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, U.S. government securities and securities of other
regulated investment companies, and other securities (for purposes of this
calculation, generally limited in respect of any one issuer, to an amount not
greater than 5% of the market value of the fund's assets and 10% of the
outstanding voting securities of such issuer) and (ii) not more than 25% of the
value of its assets is invested in the securities of (other than U.S. government
securities or the securities of other regulated investment companies) any one
issuer or two or more issuers which the fund controls and which are determined
to be engaged in the same or similar trades or businesses.

Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (a) 98% of ordinary income (generally net

AMCAP Fund -- Page 31
<PAGE>

investment income) for the calendar year, (b) 98% of capital gain (both
long-term and short-term) for the one-year period ending on October 31 (as
though the one-year period ending on October 31 were the regulated investment
company's taxable year) and (c) the sum of any untaxed, undistributed net
investment income and net capital gains of the regulated investment company for
prior periods. The term "distributed amount" generally means the sum of (a)
amounts actually distributed by the fund from its current year's ordinary income
and capital gain net income and (b) any amount on which the fund pays income tax
during the periods described above. Although the fund intends to distribute its
net investment income and net capital gains so as to avoid excise tax liability,
the fund may determine that it is in the interest of shareholders to distribute
a lesser amount.

The following information may not apply to you if you hold fund shares in a
tax-deferred account, such as a retirement plan or education savings account.
Please see your tax adviser for more information.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS -- Dividends and capital gain
distributions on fund shares will be reinvested in shares of the fund of the
same class, unless shareholders indicate in writing that they wish to receive
them in cash or in shares of the same class of other American Funds, as provided
in the prospectus. Dividends and capital gain distributions by 529 share classes
will be automatically reinvested.

Distributions of investment company taxable income and net realized capital
gains to individual shareholders will be taxable whether received in shares or
in cash, unless such shareholders are exempt from taxation. Shareholders
electing to receive distributions in the form of additional shares will have a
cost basis for federal income tax purposes in each share so received equal to
the net asset value of that share on the reinvestment date. Dividends and
capital gain distributions by the fund to a tax-deferred retirement plan account
are not taxable currently.

DIVIDENDS -- The fund intends to follow the practice of distributing
substantially all of its investment company taxable income, which includes
any excess of net realized short-term gains over net realized long-term
capital losses. Investment company taxable income generally includes
dividends, interest, net short-term capital gains in excess of net
long-term capital losses, and certain foreign currency gains, if any, less
expenses and certain foreign currency losses. To the extent the fund
invests in stock of domestic and certain foreign corporations, it may
receive "qualified dividends". The fund will designate the amount of
"qualified dividends" to its shareholders in a notice sent within 60 days
of the close of its fiscal year and will report "qualified dividends" to
shareholders on Form 1099-DIV.

Dividends from domestic corporations are expected to comprise some portion
of the fund's gross income. To the extent that such dividends constitute
any of the fund's gross income, a portion of the income distributions of
the fund may be eligible for the deduction for dividends received by
corporations. Corporate shareholders will be informed of the portion of
dividends that so qualifies. The dividends-received deduction is reduced to
the extent that either the fund shares, or the underlying shares of stock
held by the fund, with respect to which dividends are received, are treated
as debt-financed under federal income tax law, and is eliminated if the
shares are deemed to have been held by the shareholder or the fund, as the
case may be, for less than 46 days during the 90-day period beginning on
the date that is 45 days before the date on which the shares become

AMCAP Fund -- Page 32
<PAGE>

ex-dividend. Capital gain distributions are not eligible for the
dividends-received deduction.

A portion of the difference between the issue price of zero coupon
securities and their face value (original issue discount) is considered to
be income to the fund each year, even though the fund will not receive cash
interest payments from these securities. This original issue discount
(imputed income) will comprise a part of the investment company taxable
income of the fund that must be distributed to shareholders in order to
maintain the qualification of the fund as a regulated investment company
and to avoid federal income taxation at the level of the fund.

In addition, some of the bonds may be purchased by the fund at a discount
that exceeds the original issue discount on such bonds, if any. This
additional discount represents market discount for federal income tax
purposes. The gain realized on the disposition of any bond having a market
discount may be treated as taxable ordinary income to the extent it does
not exceed the accrued market discount on such bond or a fund may elect to
include the market discount in income in tax years to which it is
attributable. Generally, accrued market discount may be figured under
either the ratable accrual method or constant interest method. If the fund
has paid a premium over the face amount of a bond, the fund has the option
of either amortizing the premium until bond maturity and reducing the
fund's basis in the bond by the amortized amount, or not amortizing and
treating the premium as part of the bond's basis. In the case of any debt
security having a fixed maturity date of not more than one year from its
date of issue, the gain realized on disposition generally will be treated
as a short-term capital gain. In general, any gain realized on disposition
of a security held less than one year is treated as a short-term capital
gain.

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to follow the practice
of distributing the entire excess of net realized long-term capital gains
over net realized short-term capital losses. Net capital gains for a fiscal
year are computed by taking into account any capital loss carry forward of
the fund.

If any net long-term capital gains in excess of net short-term capital
losses are retained by the fund for reinvestment, requiring federal income
taxes to be paid thereon by the fund, the fund intends to elect to treat
such capital gains as having been distributed to shareholders. As a result,
each shareholder will report such capital gains as long-term capital gains
taxable to individual shareholders at a maximum 15% capital gains rate,
will be able to claim a pro rata share of federal income taxes paid by the
fund on such gains as a credit against personal federal income tax
liability, and will be entitled to increase the adjusted tax basis on fund
shares by the difference between a pro rata share of the retained gains and
such shareholder's related tax credit.

SHAREHOLDER TAXATION -- In January of each year, individual shareholders holding
fund shares in taxable accounts will receive a statement of the federal income
tax status of all distributions. Shareholders of the fund also may be subject to
state and local taxes on distributions received from the fund.

DIVIDENDS -- Fund dividends are taxable to shareholders as ordinary income.
Under the 2003 Tax Act, all or a portion of a fund's dividend distribution
may be a "qualified dividend." Only fund dividends derived from qualified
corporation dividends paid to the

AMCAP Fund -- Page 33
<PAGE>

fund after December 31, 2002, and held by the fund for the appropriate
holding period, will be distributed to shareholders as qualified dividends.
Interest income from bonds and money market instruments and nonqualified
foreign dividends will be distributed to shareholders as nonqualified fund
dividends. The fund will report on Form 1099-DIV the amount of each
shareholder's dividend that may be treated as a qualified dividend. If a
shareholder meets the requisite holding period requirement, qualified
dividends are taxable at a maximum tax rate of 15%.

CAPITAL GAINS -- Distributions of the excess of net long-term capital gains
over net short-term capital losses that the fund properly designates as
"capital gain dividends" generally will be taxable as long-term capital
gain. Regardless of the length of time the shares of the fund have been
held by a shareholder, a capital gain distribution by the fund is subject
to a maximum tax rate of 15%. Any loss realized upon the redemption of
shares held at the time of redemption for six months or less from the date
of their purchase will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gains during
such six-month period.

Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Investors should consider the tax implications of buying shares
just prior to a distribution. The price of shares purchased at that time
includes the amount of the forthcoming distribution. Those purchasing just prior
to a distribution will subsequently receive a partial return of their investment
capital upon payment of the distribution, which will be taxable to them.

Redemptions of shares, including exchanges for shares of other American Funds,
may result in federal, state and local tax consequences (gain or loss) to the
shareholder. However, conversion from one class to another class in the same
fund should not be a taxable event.

If a shareholder exchanges or otherwise disposes of shares of the fund within 90
days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously incurred
in acquiring the fund's shares will not be taken into account (to the extent
such previous sales charges do not exceed the reduction in sales charges) for
the purposes of determining the amount of gain or loss on the exchange, but will
be treated as having been incurred in the acquisition of such other funds. Also,
any loss realized on a redemption or exchange of shares of the fund will be
disallowed to the extent substantially identical shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of.

The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund shares, except in the case of certain exempt
shareholders. Under the backup withholding provisions of Section 3406 of the
Code, distributions of investment company taxable income and capital gains and
proceeds from the redemption or exchange of a regulated investment company may
be subject to backup withholding of federal income tax in the case of non-exempt
U.S. shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if the fund
is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable,

AMCAP Fund -- Page 34
<PAGE>

any such distributions and proceeds, whether taken in cash or reinvested in
additional shares, will be reduced by the amounts required to be withheld.

The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons (i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates). Each shareholder who is
not a U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or a
lower rate under an applicable income tax treaty) on dividend income received by
the shareholder.

Shareholders should consult their tax advisers about the application of federal,
state and local tax law in light of their particular situation.

UNLESS OTHERWISE NOTED, ALL REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C
OR F SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F
SHARES. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO THE COLLEGEAMERICA PROGRAM
DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES SPECIFICALLY RELATING TO
COLLEGEAMERICA ACCOUNTS. SHAREHOLDERS HOLDING SHARES THROUGH AN ELIGIBLE
RETIREMENT PLAN SHOULD CONTACT THEIR PLAN'S ADMINISTRATOR OR RECORDKEEPER FOR
INFORMATION REGARDING PURCHASES, SALES AND EXCHANGES.

PURCHASE AND EXCHANGE OF SHARES

PURCHASES BY INDIVIDUALS -- As described in the prospectus, you may generally
open an account and purchase fund shares by contacting a financial adviser or
investment dealer authorized to sell the fund's shares. You may make investments
by any of the following means:

CONTACTING YOUR FINANCIAL ADVISER -- Deliver or mail a check to your
financial adviser.

BY MAIL -- for initial investments, you may mail a check, made payable to
the fund, directly to the address indicated on the account application.
Please indicate an investment dealer on the account application. You may
make additional investments by filling out the "Account Additions" form at
the bottom of a recent account statement and mailing the form, along with a
check made payable to the fund, using the envelope provided with your
account statement.

BY TELEPHONE -- using the American FundsLine. Please see the "Shareholder
account services and privileges" section of this document for more
information regarding this service.

BY INTERNET -- using americanfunds.com. Please see the "Shareholder account
services and privileges" section of this document for more information
regarding this service.

AMCAP Fund -- Page 35
<PAGE>

BY WIRE -- If you are making a wire transfer, instruct your bank to wire
funds to:

Wells Fargo Bank
ABA Routing No. 121000248
Account No. 4600-076178

Your bank should include the following information when
wiring funds:

For credit to the account of:
American Funds Service Company
(fund's name)

For further credit to:
(shareholder's fund account number)
(shareholder's name)

You may contact American Funds Service Company at 800/421-0180 if you have
questions about making wire transfers.
The Principal Underwriter will not knowingly sell shares of the fund directly or
indirectly to any person or entity, where, after the sale, such person or entity
would own beneficially directly or indirectly more than 3.0% of the outstanding
shares of the fund without the consent of a majority of the fund's Board.

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. The R share classes are generally available only to
employer-sponsored retirement plans. Class R-5 shares are also available to
clients of the Personal Investment Management group of Capital Guardian Trust
Company who do not have an intermediary associated with their accounts and
without regard to the $1 million purchase minimum. In addition, the American
Funds state tax-exempt funds are qualified for sale only in certain
jurisdictions, and tax-exempt funds in general should not serve as retirement
plan investments. The fund and the Principal Underwriter reserve the right to
reject any purchase order.

PURCHASE MINIMUMS AND MAXIMUMS -- All investments are subject to the purchase
minimums and maximums described in the prospectus. Purchase minimums may be
waived or reduced in certain cases. For accounts established with an automatic
investment plan, the initial purchase minimum of $250 may be waived if the
purchases (including purchases through exchanges from another fund) made under
the plan are sufficient to reach $250 within five months of account
establishment.

The initial purchase minimum of $25 may be waived for the
following account types:

. Payroll deduction retirement plan accounts (such as, but not limited
to, 403(b), 401(k), SIMPLE IRA, SARSEP and deferred compensation plan
accounts); and

. Employer-sponsored CollegeAmerica accounts.

AMCAP Fund -- Page 36
<PAGE>

The following account types may be established without meeting the initial
purchase minimum:

. Retirement accounts that are funded with employer contributions; and

. Accounts that are funded with monies set by court decree.

The following account types may be established without meeting the initial
purchase minimum, but shareholders wishing to invest in two or more funds must
meet the normal initial purchase minimum of each fund:

. Accounts that are funded with (a) transfers of assets, (b) rollovers
from retirement plans, (c) rollovers from 529 college savings plans or
(d) required minimum distribution automatic exchanges; and

. American Funds money market fund accounts registered in the name of
clients of Capital Guardian Trust Company's Personal Investment
Management group.

EXCHANGES -- You may only exchange shares into other American Funds within the
same share class. However, exchanges from Class A shares of The Cash Management
Trust of America may be made to Class B or C shares of other American Funds for
dollar cost averaging purposes. Exchange purchases are subject to the minimum
investment requirements of the fund purchased and no sales charge generally
applies. However, exchanges of shares from American Funds money market funds are
subject to applicable sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange from a fund having a sales
charge, or by reinvestment or cross-reinvestment of dividends or capital gain
distributions. Exchanges of Class F shares generally may only be made through
fee-based programs of investment firms that have special agreements with the
fund's distributor and certain registered investment advisers.

You may exchange shares of other classes by contacting the Transfer Agent, by
contacting your investment dealer or financial adviser, by using American
FundsLine or americanfunds.com, or by telephoning 800/421-0180 toll-free, or
faxing (see "American Funds Service Company service areas" in the prospectus for
the appropriate fax numbers) the Transfer Agent. For more information, see
"Shareholder account services and privileges" below. THESE TRANSACTIONS HAVE THE
SAME TAX CONSEQUENCES AS ORDINARY SALES AND PURCHASES.

Shares held in employer-sponsored retirement plans may be exchanged into other
American Funds by contacting your plan administrator or recordkeeper. Exchange
redemptions and purchases are processed simultaneously at the share prices next
determined after the exchange order is received (see "Price of shares" above).

FREQUENT TRADING OF FUND SHARES -- As noted in the prospectus, certain
redemptions may trigger a purchase block lasting 30 calendar days under the
fund's "purchase blocking policy." Under this policy, systematic redemptions
will not trigger a purchase block and systematic purchases will not be
prevented. For purposes of this policy, systematic redemptions include, for
example, regular periodic automatic redemptions and statement of intention
escrow share redemptions. Systematic purchases include, for example, regular
periodic automatic purchases and automatic reinvestments of dividends and
capital gain distributions.

OTHER POTENTIALLY ABUSIVE ACTIVITY -- In addition to implementing purchase
blocks, American Funds Service Company will monitor for other types of activity
that could potentially be harmful to the American Funds - for example,
short-term trading activity in multiple funds. When identified,

AMCAP Fund -- Page 37
<PAGE>

American Funds Service Company will request that the shareholder discontinue the
activity. If the activity continues, American Funds Service Company will freeze
the shareholder account to prevent all activity other than redemptions of fund
shares.

MOVING BETWEEN SHARE CLASSES

AUTOMATIC CONVERSIONS -- As described more fully in the prospectus, Class
B, 529-B and C shares automatically convert to Class A, 529-A and F shares,
respectively, after a certain period from the purchase date.

MOVING FROM CLASS B TO CLASS A SHARES -- Under the right of reinvestment
policy as described in the prospectus, if you redeem Class B shares during
the contingent deferred sales charge period, you may reinvest the proceeds
in Class A shares without paying a Class A sales charge if you notify
American Funds Service Company and the reinvestment occurs within 90 days
after the date of redemption. If you redeem your Class B shares after the
contingent deferred sales charge period and with the redemption proceeds
you purchase Class A shares, you are still responsible for paying any
applicable Class A sales charges.

MOVING FROM CLASS C TO CLASS A SHARES -- If you redeem Class C shares and
with the redemption proceeds purchase Class A shares, you are still
responsible for paying any Class C contingent deferred sales charges and
applicable Class A sales charges.

MOVING FROM CLASS F TO CLASS A SHARES -- You can redeem Class F shares held
in a qualified fee-based program and with the redemption proceeds purchase
Class A shares without paying an initial Class A sales charge if all of the
following are met: (a) you are leaving or have left the fee-based program,
(b) you have held the Class F shares in the program for at least one year,
and (c) you notify American Funds Service Company and purchase the Class A
shares within 90 days after redeeming the Class F shares.

MOVING FROM CLASS A TO CLASS F SHARES -- If you are part of a qualified
fee-based program and you wish to redeem your Class A shares and with the
redemption proceeds purchase Class F shares for the program, any Class A
sales charges (including contingent deferred sales charges) that you paid
or are payable will not be credited back to your account.

SALES CHARGES

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES -- As described in the
prospectus, certain purchases of Class A shares are not subject to a sales
charge. Additional information regarding certain of such purchases is described
below.

EMPLOYER-SPONSORED RETIREMENT PLANS

As noted in the prospectus, employer-sponsored retirement plans are not
eligible to purchase Class A shares without a sales charge, or establish a
statement of intention to do so, unless they currently invest in Class A
shares. Individual 403(b) plans may be treated as employer-sponsored plans
for sales charge purposes (i.e., individual participant accounts are
eligible to be aggregated together) if: (a) the American Funds are
principal investment options; (b) the employer facilitates the enrollment
process by, for

AMCAP Fund -- Page 38
<PAGE>

example, allowing for onsite group enrollment meetings held during working
hours; and (c) there is only one dealer firm assigned to the plans.

OTHER PURCHASES

Pursuant to a determination of eligibility by a vice president or more
senior officer of the Capital Research and Management Company Fund
Administration Unit, or by his or her designee, Class A shares of the
American Funds stock, stock/bond and bond funds may be sold at net asset
value to:

(1) current or retired directors, trustees, officers and advisory board
members of, and certain lawyers who provide services to, the funds
managed by Capital Research and Management Company, current or retired
employees of Washington Management Corporation, current or retired
employees and partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members and employees of the
above persons, and trusts or plans primarily for such persons;

(2) current registered representatives and assistants directly employed by
such representatives, retired registered representatives with respect
to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the spouses, children or parents of the Eligible
Persons are listed in the account registration with the
parents-in-law) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such
dealers), plans for the dealers, and plans that include as
participants only the Eligible Persons, their spouses, parents and/or
children;

(3) current registered investment advisers ("RIAs") and assistants
directly employed by such RIAs, retired RIAs with respect to accounts
established while active, or full-time employees (collectively,
"Eligible Persons") (and their (a) spouses or equivalents if
recognized under local law, (b) parents and children, including
parents and children in step and adoptive relationships, sons-in-law
and daughters-in-law and (c) parents-in-law, the Eligible Persons or
the spouses, children or parents of the Eligible Persons are listed in
the account registration with the parents-in-law) of RIA firms that
are authorized to sell shares of the funds, plans for the RIA firms,
and plans that include as participants only the Eligible persons,
their spouses, parents and/or children;

(4) companies exchanging securities with the fund through a merger,
acquisition or exchange offer;

(5) insurance company separate accounts;

(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.;

(7) The Capital Group Companies, Inc., its affiliated companies and
Washington Management Corporation;

(8) an individual or entity with a substantial business relationship with
The Capital Group Companies, Inc. or its affiliates, or an individual
or entity related or relating to such individual or entity;

AMCAP Fund -- Page 39
<PAGE>

(9) wholesalers and full-time employees directly supporting wholesalers
involved in the distribution of insurance company separate accounts
whose underlying investments are managed by any affiliate of The
Capital Group Companies, Inc.; and

(10) full-time employees of banks that have sales agreements with the
Principal Underwriter, who are solely dedicated to directly supporting
the sale of mutual funds.

Shares are offered at net asset value to these persons and organizations
due to anticipated economies in sales effort and expense. Once an account
is established under this net asset value privilege, additional investments
can be made at net asset value for the life of the account.

EDWARD JONES FREE SWITCH PROGRAM

Eligible clients of broker-dealer Edward Jones may purchase Class A shares
at net asset value under the terms of the Edward Jones Free Switch program.
The program applies to purchases initiated within the 90-day period
beginning August 19, 2005, and ending November 16, 2005, at 3:00 p.m.
Central time. The fund's Board has determined that it would be in the best
interests of the fund and its shareholders and desirable to have the fund
participate in the program.

DEALER COMMISSIONS AND COMPENSATION -- Commissions (up to 1.00%) are paid to
dealers who initiate and are responsible for certain Class A share purchases not
subject to sales charges. These purchases consist of purchases of $1 million or
more, purchases by employer-sponsored defined contribution-type retirement plans
investing $1 million or more or with 100 or more eligible employees and
purchases made at net asset value by certain retirement plans, endowments and
foundations with assets of $50 million or more. Commissions on such investments
(other than IRA rollover assets that roll over at no sales charge under the
fund's IRA rollover policy as described in the prospectus and statement of
additional information) are paid to dealers at the following rates: 1.00% on
amounts to $4 million, 0.50% on amounts over $4 million to $10 million and 0.25%
on amounts over $10 million. Commissions are based on cumulative investments and
are not annually reset.

A dealer concession of up to 1% may be paid by the fund under its Class A plan
of distribution to reimburse the Principal Underwriter in connection with dealer
and wholesaler compensation paid by it with respect to investments made with no
initial sales charge.

SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE -- As described in the prospectus, there are
various ways to reduce your sales charge when purchasing Class A shares.
Additional information about Class A sales charge reductions is provided below.

STATEMENT OF INTENTION -- By establishing a statement of intention (the
"Statement"), you enter into a nonbinding commitment to purchase shares of
American Funds non-money market funds over a 13-month period and receive
the same sales charge as if all shares had been purchased at once.

AMCAP Fund -- Page 40
<PAGE>

When a shareholder elects to use a Statement, shares equal to 5% of the
dollar amount specified in the Statement will be held in escrow in the
shareholder's account out of the initial purchase (or subsequent purchases,
if necessary) by the Transfer Agent. All dividends and any capital gain
distributions on shares held in escrow will be credited to the
shareholder's account in shares (or paid in cash, if requested). If the
intended investment is not completed within the specified 13-month period,
the purchaser will remit to the Principal Underwriter the difference
between the sales charge actually paid and the sales charge which would
have been paid if the total of such purchases had been made at a single
time. The dealer assigned to the account at the end of the period will
receive an appropriate commission adjustment. If the difference is not paid
by the close of the Statement period, the appropriate number of shares held
in escrow will be redeemed to pay such difference. If the proceeds from
this redemption are inadequate, the purchaser will be liable to the
Principal Underwriter for the balance still outstanding.

The Statement may be revised upward at any time during the 13-month period,
and such a revision will be treated as a new Statement, except that the
13-month period during which the purchase must be made will remain
unchanged. Accordingly, upon your request, the sales charge paid on
investments made 90 days prior to the Statement revision will be adjusted
to reflect the revised Statement.

Existing holdings eligible for rights of accumulation (see below) may be
credited toward satisfying the Statement.

The Statement will be considered completed if the shareholder dies within
the 13-month Statement period. Commissions to dealers will not be adjusted
or paid on the difference between the Statement amount and the amount
actually invested before the shareholder's death.

When the trustees of certain retirement plans purchase shares by payroll
deduction, the sales charge for the investments made during the 13-month
period will be handled as follows: the total monthly investment will be
multiplied by 13 and then multiplied by 1.5. The current value of existing
American Funds investments (other than shares representing direct purchases
of money market funds) and any rollovers or transfers reasonably
anticipated to be invested in non-money market American Funds during the
13-month period are added to the figure determined above. The sum is the
Statement amount and applicable breakpoint level. On the first investment
and all other investments made pursuant to the Statement, a sales charge
will be assessed according to the sales charge breakpoint thus determined.
There will be no retroactive adjustments in sales charges on investments
made during the 13-month period.

Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms and those in the prospectus with
their first purchase.

AMCAP Fund -- Page 41
<PAGE>

AGGREGATION -- Qualifying investments for aggregation include those made by
you and your "immediate family" as defined in the prospectus, if all
parties are purchasing shares for their own accounts and/or:

. individual-type employee benefit plan(s), such as an IRA, 403(b) plan
(see exception below) or single-participant Keogh-type plan;

. business accounts solely controlled by you or your immediate family
(for example, you own the entire business);
.
trust accounts established by you or your immediate family (For trusts
with only one primary beneficiary, upon the trustor's death the trust
account may be aggregated with such beneficiary's own accounts; for
trusts with multiple primary beneficiaries, upon the trustor's death
the trustees of the trust may instruct American Funds Service Company
to establish separate trust accounts for each primary beneficiary;
each primary beneficiary's separate trust account may then be
aggregated with such beneficiary's own accounts);

. endowments or foundations established and controlled by you or your
immediate family; or

.
CollegeAmerica accounts, which will be aggregated at the account owner
level (Class 529-E accounts may only be aggregated with an eligible
employer plan).

Individual purchases by a trustee(s) or other fiduciary(ies) may also be
aggregated if the investments are:

. for a single trust estate or fiduciary account, including employee
benefit plans other than the individual-type employee benefit plans
described above;

.
made for two or more employee benefit plans of a single employer or of
affiliated employers as defined in the 1940 Act, again excluding
individual-type employee benefit plans described above;

. for a diversified common trust fund or other diversified pooled
account not specifically formed for the purpose of accumulating fund
shares;

. for nonprofit, charitable or educational organizations (or any
employer-sponsored retirement plan for such an endowment or
foundation), or any endowments or foundations established and
controlled by the organization; or

. for participant accounts of a 403(b) plan that is treated as an
employer-sponsored plan (see "Class A purchases not subject to sales
charges" above), or made for two or more 403(b) plans that are treated
as employer-sponsored plans of a single employer or affiliated
employers as defined in the 1940 Act.

Purchases made for nominee or street name accounts (securities held in the
name of an investment dealer or another nominee such as a bank trust
department instead of the customer) may not be aggregated with those made
for other accounts and may not be aggregated with other nominee or street
name accounts unless otherwise qualified as described above.

CONCURRENT PURCHASES -- As described in the prospectus, you may reduce your
Class A sales charge by combining purchases of all classes of shares in the
American Funds, as well as individual holdings in Endowments, American
Legacy variable annuity contracts

AMCAP Fund -- Page 42
<PAGE>

and variable life insurance policies. Shares of money market funds
purchased through an exchange, reinvestment or cross-reinvestment from a
fund having a sales charge also qualify. However, direct purchases of
American Funds money market funds are excluded.
RIGHTS OF ACCUMULATION -- Subject to the limitations described in the
aggregation policy, you may take into account your accumulated holdings in
all share classes of the American Funds, as well as your holdings in
Endowments, to determine your sales charge on investments in accounts
eligible to be aggregated. Subject to your investment dealer's or
recordkeeper's capabilities, your accumulated holdings will be calculated
as the higher of (a) the current value of your existing holdings (the
"market value") or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals (the "cost value"). Depending on the entity on whose books your
account is held, the value of your holdings in that account may not be
eligible for calculation at cost value. For example, the value of accounts
held in nominee or street name are not eligible for calculation at cost
value and instead will be calculated at market value for purposes of rights
of accumulation.

The value of all of your holdings in accounts established in calendar year
2005 or earlier will be assigned an initial cost value equal to the market
value of those holdings as of the last business day of 2005. Thereafter,
the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser
or American Funds Service Company if you have additional information that
is relevant to the calculation of the value of your holdings.

When determining your American Funds Class A sales charge, if you are not
an employer-sponsored retirement plan, you may also take into account the
market value (as of the end of the week prior to your American Funds
investment) of your individual holdings in various American Legacy variable
annuity contracts and variable life insurance policies. An
employer-sponsored retirement plan may also take into account the market
value of its investments in American Legacy Retirement Investment Plans.
Direct purchases of American Funds money market funds are excluded. If you
make a gift of American Funds Class A shares, upon your request, you may
purchase the shares at the sales charge discount allowed under rights of
accumulation of all of your American Funds and American Legacy accounts.

CDSC WAIVERS FOR CLASS A, B AND C SHARES -- As noted in the prospectus, a
contingent deferred sales charge ("CDSC") may be waived for redemptions due to
death or postpurchase disability of a shareholder (this generally excludes
accounts registered in the names of trusts and other entities). In the case of
joint tenant accounts, if one joint tenant dies, a surviving joint tenant, at
the time he or she notifies the Transfer Agent of the other joint tenant's death
and removes the decedent's name from the account, may redeem shares from the
account without incurring a CDSC. Redemptions made after the Transfer Agent is
notified of the death of a joint tenant will be subject to a CDSC.

AMCAP Fund -- Page 43
<PAGE>

In addition, a CDSC may be waived for the following types of transactions, if
together they do not exceed 12% of the value of an "account" (defined below)
annually (the "12% limit"):

. Required minimum distributions taken from retirement accounts upon the
shareholder's attainment of age 70-1/2 (required minimum distributions
that continue to be taken by the beneficiary(ies) after the account
owner is deceased also qualify for a waiver).

. Redemptions through a systematic withdrawal plan (SWP) (see "Automatic
withdrawals" under "Shareholder account services and privileges"
below). For each SWP payment, assets that are not subject to a CDSC,
such as appreciation on shares and shares acquired through
reinvestment of dividends and/or capital gain distributions, will be
redeemed first and will count toward the 12% limit. If there is an
insufficient amount of assets not subject to a CDSC to cover a
particular SWP payment, shares subject to the lowest CDSC will be
redeemed next until the 12% limit is reached. Any dividends and/or
capital gain distributions taken in cash by a shareholder who receives
payments through a SWP will also count toward the 12% limit. In the
case of a SWP, the 12% limit is calculated at the time a systematic
redemption is first made, and is recalculated at the time each
additional systematic redemption is made. Shareholders who establish a
SWP should be aware that the amount of a payment not subject to a CDSC
may vary over time depending on fluctuations in the value of their
accounts. This privilege may be revised or terminated at any time.

For purposes of this paragraph, "account" means:

.in the case of Class A shares, your investment in Class A shares of
all American Funds (investments representing direct purchases of
American Funds money market funds are excluded);

.in the case of Class B shares, your investment in Class B shares of
the particular fund from which you are making the redemption; and

.in the case of Class C shares, your investment in Class C shares of
the particular fund from which you are making the redemption.

CDSC waivers are allowed only in the cases listed here and in the prospectus.
For example, CDSC waivers will not be allowed on redemptions of Class 529-B and
529-C shares due to termination of CollegeAmerica; a determination by the
Internal Revenue Service that CollegeAmerica does not qualify as a qualified
tuition program under the Code; proposal or enactment of law that eliminates or
limits the tax-favored status of CollegeAmerica; or the Virginia College Savings
Plan eliminating the fund as an option for additional investment within
CollegeAmerica.

ROLLOVERS FROM RETIREMENT PLANS TO IRAS

As noted in the prospectus, assets from retirement plans may be invested in
Class A, B, C or F shares through an IRA rollover. Rollovers invested in Class A
shares from retirement plans will be subject to applicable sales charges. The
following rollovers to Class A shares will be made at no sales charge:

. Rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

AMCAP Fund -- Page 44
<PAGE>

. Rollovers to IRAs that are attributable to American Funds investments, if
they meet the following three requirements:

-- The retirement plan from which assets are being rolled over is part of
an American Funds proprietary retirement plan program (such as
PlanPremier,/(R)/ Recordkeeper Direct/(R)/ or Recordkeeper
Connect/(R)/) or is a plan whose participant subaccounts are serviced
by American Funds Service Company.

-- The plan's assets were invested in American Funds at the time of
distribution.

-- The plan's assets are rolled over to an American Funds IRA with
Capital Bank and Trust Company as custodian.

IRA rollover assets that roll over at no sales charge as described above will
not be subject to a contingent deferred sales charge and investment dealers will
be compensated solely with an annual service fee that begins to accrue
immediately. IRA rollover assets that are not attributable to American Funds
investments, as well as future contributions to the IRA, will be subject to
sales charges and the terms and conditions generally applicable to Class A share
investments as described in the prospectus and statement of additional
information if invested in Class A shares.

SELLING SHARES

The methods for selling (redeeming) shares are described more fully in the
prospectus. If you wish to sell your shares by contacting American Funds Service
Company directly, any such request must be signed by the registered
shareholders.

A signature guarantee may be required for certain redemptions. In such an event,
your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution. The Transfer Agent reserves the
right to require a signature guarantee on any redemptions.

Additional documentation may be required for sales of shares held in corporate,
partnership or fiduciary accounts. You must include with your written request
any shares you wish to sell that are in certificate form.

If you sell Class A, B or C shares and request a specific dollar amount to be
sold, we will sell sufficient shares so that the sale proceeds, after deducting
any applicable CDSC, equals the dollar amount requested.

Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.

You may request that redemption proceeds of $1,000 or more from money market
funds be wired to your bank by writing American Funds Service Company. A
signature guarantee is required on all requests to wire funds.

AMCAP Fund -- Page 45
<PAGE>

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges may not be available for
Class 529 shareholders or if your account is held with an investment dealer or
through an employer-sponsored retirement plan.

AUTOMATIC INVESTMENT PLAN -- An automatic investment plan enables you to make
monthly or quarterly investments in the American Funds through automatic debits
from your bank account. To set up a plan, you must fill out an account
application and specify the amount that you would like to invest ($50 minimum)
and the date on which you would like your investments to occur. The plan will
begin within 30 days after your account application is received. Your bank
account will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified. If the
date you specified falls on a weekend or holiday, your money will be invested on
the following business day. However, if the following business day falls in the
next month, your money will be invested on the business day immediately
preceding the weekend or holiday. If your bank account cannot be debited due to
insufficient funds, a stop-payment or the closing of the account, the plan may
be terminated and the related investment reversed. You may change the amount of
the investment or discontinue the plan at any time by contacting the Transfer
Agent.

AUTOMATIC REINVESTMENT -- Dividends and capital gain distributions are
reinvested in additional shares of the same class and fund at net asset value
unless you indicate otherwise on the account application. You also may elect to
have dividends and/or capital gain distributions paid in cash by informing the
fund, the Transfer Agent or your investment dealer. Dividends and capital gain
distributions paid to retirement plan shareholders or shareholders of the 529
share classes will be automatically reinvested.

If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option will automatically be converted to having all dividends and other
distributions reinvested in additional shares.

CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- For all share classes,
except the 529 classes of shares, you may cross-reinvest dividends and capital
gains (distributions) into other American Funds in the same share class at net
asset value, subject to the following conditions:

(1) the aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement);

(2) if the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested; and

(3) if you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.

AMCAP Fund -- Page 46
<PAGE>

AUTOMATIC EXCHANGES -- For all share classes, you may automatically exchange
shares of the same class in amounts of $50 or more among any of the American
Funds on any day (or preceding business day if the day falls on a nonbusiness
day) of each month you designate.

AUTOMATIC WITHDRAWALS -- For all share classes, except the R and 529 classes of
shares, you may automatically withdraw shares from any of the American Funds.
You can make automatic withdrawals of $50 or more as often as you wish if your
account is worth at least $10,000, or up to four times a year for an account
worth at least $5,000. You can designate the day of each period for withdrawals
and request that checks be sent to you or someone else. Withdrawals may also be
electronically deposited to your bank account. The Transfer Agent will withdraw
your money from the fund you specify on or around the date you specify. If the
date you specified falls on a weekend or holiday, the redemption will take place
on the previous business day. However, if the previous business day falls in the
preceding month, the redemption will take place on the following business day
after the weekend or holiday.

Withdrawal payments are not to be considered as dividends, yield or income.
Automatic investments may not be made into a shareholder account from which
there are automatic withdrawals. Withdrawals of amounts exceeding reinvested
dividends and distributions and increases in share value would reduce the
aggregate value of the shareholder's account. The Transfer Agent arranges for
the redemption by the fund of sufficient shares, deposited by the shareholder
with the Transfer Agent, to provide the withdrawal payment specified.

ACCOUNT STATEMENTS -- Your account is opened in accordance with your
registration instructions. Transactions in the account, such as additional
investments, will be reflected on regular confirmation statements from the
Transfer Agent. Dividend and capital gain reinvestments, purchases through
automatic investment plans and certain retirement plans, as well as automatic
exchanges and withdrawals will be confirmed at least quarterly.

AMERICAN FUNDSLINE AND AMERICANFUNDS.COM -- You may check your share balance,
the price of your shares or your most recent account transaction; redeem shares
(up to $75,000 per American Funds shareholder each day) from nonretirement plan
accounts; or exchange shares around the clock with American FundsLine or using
americanfunds.com. To use American FundsLine, call 800/325-3590 from a
TouchTone(TM) telephone. Redemptions and exchanges through American FundsLine
and americanfunds.com are subject to the conditions noted above and in
"Telephone and Internet purchases, redemptions and exchanges" below. You will
need your fund number (see the list of the American Funds under "General
information -- fund numbers"), personal identification number (generally the
last four digits of your Social Security number or other tax identification
number associated with your account) and account number.

Generally, all shareholders are automatically eligible to use these services.
However, if you are not currently authorized to do so, you may complete an
American FundsLink Authorization Form. Once you establish this privilege, you,
your financial adviser or any person with your account information may use these
services.

TELEPHONE AND INTERNET PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine) or the Internet (including
americanfunds.com), or fax purchase, redemption and/or exchange options, you
agree to hold the fund, the Transfer Agent, any of its affiliates or mutual
funds managed by such affiliates, and each of their respective directors,
trustees, officers, employees and agents harmless from any losses, expenses,
costs or liability (including attorney fees) that may be incurred in connection
with the exercise of these privileges.

AMCAP Fund -- Page 47
<PAGE>

Generally, all shareholders are automatically eligible to use these services.
However, you may elect to opt out of these services by writing the Transfer
Agent (you may also reinstate them at any time by writing the Transfer Agent).
If the Transfer Agent does not employ reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine, it and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions. In the event that shareholders are unable to reach the
fund by telephone because of technical difficulties, market conditions or a
natural disaster, redemption and exchange requests may be made in writing only.

CHECKWRITING -- You may establish check writing privileges for Class A shares
(but not Class 529-A shares) of American Funds money market funds. This can be
done by using an account application. If you request check writing privileges,
you will be provided with checks that you may use to draw against your account.
These checks may be made payable to anyone you designate and must be signed by
the authorized number of registered shareholders exactly as indicated on your
checking account signature card.

REDEMPTION OF SHARES -- The fund's Articles of Incorporation permit the fund to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder of record owns
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the Board of Directors of the fund may from time to time
adopt.

While payment of redemptions normally will be in cash, the fund's Articles of
Incorporation permit payment of the redemption price wholly or partly in
securities or other property included in the assets belonging to the fund when
in the opinion of the fund's Board of Directors, which shall be conclusive,
conditions exist which make payment wholly in cash unwise or undesirable.

SHARE CERTIFICATES -- Shares are credited to your account and certificates are
not issued unless you request them by contacting the Transfer Agent.
Certificates are not available for the 529 or R share classes.

GENERAL INFORMATION

CUSTODIAN OF ASSETS -- Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017-2070, as
Custodian. If the fund holds non-U.S. securities, the Custodian may hold these
securities pursuant to subcustodial arrangements in non-U.S. banks or non-U.S.
branches of U.S. banks.

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of shareholder accounts, processes
purchases and redemptions of the fund's shares, acts as dividend and capital
gain distribution disbursing agent, and performs other related shareholder
service functions. The principal office of American Funds Service Company is
located at 135 South State College Boulevard, Brea, CA 92821-5823. American
Funds Service Company was paid a fee of $13,228,000 for Class A shares and
$1,027,000 for Class B shares for the 2005 fiscal year.

In the case of certain shareholder accounts, third parties who may be
unaffiliated with the investment adviser provide transfer agency and shareholder
services in place of American Funds

AMCAP Fund -- Page 48
<PAGE>

Service Company. These services are rendered under agreements with American
Funds Service Company or its affiliates and the third parties receive
compensation according to such agreements. Compensation for transfer agency and
shareholder services, whether paid to American Funds Service Company or such
third parties, is ultimately paid from fund assets and is reflected in the
expenses of the fund as disclosed in the prospectus.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- Deloitte & Touche LLP, 695 Town
Center Drive, Costa Mesa, California 92626, serves as the fund's independent
registered public accounting firm, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. The financial statements included in this statement of
additional information from the annual report have been so included in reliance
on the report of Deloitte & Touche LLP, independent registered public accounting
firm, given on the authority of said firm as experts in accounting and auditing.
The selection of the fund's independent registered public accounting firm is
reviewed and determined annually by the Board of Directors.

INDEPENDENT LEGAL COUNSEL -- O'Melveny & Myers LLP, 400 South Hope Street, Los
Angeles, CA 90071, serves as counsel for the fund and for Directors who are not
"interested persons" (as defined by the 1940 Act) of the fund in their
capacities as such. Certain legal matters in connection with the capital shares
offered by the prospectus have been passed upon for the fund by O'Melveny &
Myers LLP. Counsel does not provide legal services to the fund's investment
adviser or any of its affiliated companies or control persons. A determination
with respect to the independence of the fund's "independent legal counsel" will
be made at least annually by the independent Directors of the fund, as
prescribed by the 1940 Act and related rules.

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on February 28 or 29. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the investment
portfolio, financial statements and other information. The fund's annual
financial statements are audited by the fund's independent registered public
accounting firm, Deloitte & Touche LLP. In addition, shareholders may also
receive proxy statements for the fund. In an effort to reduce the volume of mail
shareholders receive from the fund when a household owns more than one account,
the Transfer Agent has taken steps to eliminate duplicate mailings of
prospectuses, shareholder reports and proxy statements. To receive additional
copies of a prospectus, report or proxy statement, shareholders should contact
the Transfer Agent.

CODES OF ETHICS -- The fund and Capital Research and Management Company and its
affiliated companies, including the fund's Principal Underwriter, have adopted
codes of ethics that allow for personal investments, including securities in
which the fund may invest from time to time. These codes include a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; preclearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; blackout periods on personal
investing for certain investment personnel; ban on short-term trading profits
for investment personnel; limitations on service as a director of publicly
traded companies; and disclosure of personal securities transactions.

LEGAL PROCEEDINGS -- On February 16, 2005, the NASD filed an administrative
complaint against the Principal Underwriter. The complaint alleges violations of
certain NASD rules by the Principal Underwriter with respect to the selection of
broker-dealer firms that buy and sell

AMCAP Fund -- Page 49
<PAGE>

securities for mutual fund investment portfolios. The complaint seeks sanctions,
restitution and disgorgement.

On March 24, 2005, the investment adviser and Principal Underwriter filed a
complaint against the Attorney General of the State of California in Los Angeles
County Superior Court. The complaint alleged that the Attorney General
threatened to take enforcement actions against the investment adviser and
Principal Underwriter that are without merit and preempted by federal law. On
the same day, following the filing of the investment adviser's and Principal
Underwriter's complaint, the Attorney General of the State of California filed a
complaint against the Principal Underwriter and investment adviser. Filed in Los
Angeles County Superior Court, the Attorney General's complaint alleged
violations of certain sections of the California Corporations Code with respect
to so-called "revenue sharing" disclosures in mutual fund prospectuses and
statements of additional information. On November 22, 2005, the Los Angeles
Superior Court dismissed the Attorney General's complaint. On February 7, 2006,
the Attorney General filed a notice that he intends to appeal the Superior
Court's decision to California's Court of Appeal for the Second Appellate
District.

The investment adviser and Principal Underwriter believe that the likelihood
that these matters could have a material adverse effect on the fund or on the
ability of the investment adviser or Principal Underwriter to perform their
contracts with the fund is remote. The SEC is conducting a related investigation
as of the date of this statement of additional information. The investment
adviser and Principal Underwriter are cooperating fully. In addition, a class
action lawsuit has been filed in the U.S. District Court, Central District of
California, relating to these matters. Although the suit was dismissed in its
entirety, an amended complaint relating to management fees has been filed. The
investment adviser believes that this suit is without merit and will defend
itself vigorously. Further updates on these issues will be available on the
American Funds website (americanfunds.com) under "American Funds regulatory
matters."

OTHER INFORMATION -- The financial statements including the investment portfolio
and the report of the fund's independent registered public accounting firm
contained in the annual report are included in this statement of additional
information. The following information is not included in the annual report:

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- FEBRUARY 28, 2005

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $18.02
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . $19.12

AMCAP Fund -- Page 50
<PAGE>

FUND NUMBERS -- Here are the fund numbers for use with our automated telephone
line, American FundsLine/(R)/, or when making share transactions:

FUND NUMBERS
------------------------------------
FUND CLASS A CLASS B CLASS C CLASS F
-----------------------------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . . . . 002 202 302 402
American Balanced Fund/(R)/ . . . . . . . . . . . . . . . . . 011 211 311 411
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . . . . 003 203 303 403
Capital Income Builder/(R)/ . . . . . . . . . . . . . . . . . 012 212 312 412
Capital World Growth and Income Fund/SM/ . . . . . . . . . . . 033 233 333 433
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . . . . . 016 216 316 416
Fundamental Investors/SM/ . . . . . . . . . . . . . . . . . . 010 210 310 410
The Growth Fund of America/(R)/ . . . . . . . . . . . . . . . 005 205 305 405
The Income Fund of America/(R)/ . . . . . . . . . . . . . . . 006 206 306 406
The Investment Company of America/(R)/ . . . . . . . . . . . . 004 204 304 404
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . . . . 014 214 314 414
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . . . . 007 207 307 407
New World Fund/SM/ . . . . . . . . . . . . . . . . . . . . . . 036 236 336 436
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . . . . . 035 235 335 435
Washington Mutual Investors Fund/SM/ . . . . . . . . . . . . . 001 201 301 401
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . . . . 040 240 340 440
American High-Income Trust/SM/ . . . . . . . . . . . . . . . . 021 221 321 421
The Bond Fund of America/SM/ . . . . . . . . . . . . . . . . . 008 208 308 408
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . . . . . 031 231 331 431
Intermediate Bond Fund of America/SM/ . . . . . . . . . . . . 023 223 323 423
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . . . . . 043 243 343 443
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . . . . . 019 219 319 419
The Tax-Exempt Fund of California/(R)/* . . . . . . . . . . . 020 220 320 420
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . . . . 024 224 324 424
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . . . . 025 225 325 425
U.S. Government Securities Fund/SM/ . . . . . . . . . . . . . 022 222 322 422
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . . . . 009 209 309 409
The Tax-Exempt Money Fund of America/SM/ . . . . . . . . . . . 039 N/A N/A N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . . . . 049 N/A N/A N/A
___________
*Qualified for sale only in certain jurisdictions.

AMCAP Fund -- Page 51
<PAGE>

FUND NUMBERS
---------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F
-------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . 1002 1202 1302 1502 1402
American Balanced Fund . . . . 1011 1211 1311 1511 1411
American Mutual Fund . . . . . 1003 1203 1303 1503 1403
Capital Income Builder . . . . 1012 1212 1312 1512 1412
Capital World Growth and Income
Fund . . . . . . . . . . . . . 1033 1233 1333 1533 1433
EuroPacific Growth Fund . . . . 1016 1216 1316 1516 1416
Fundamental Investors . . . . . 1010 1210 1310 1510 1410
The Growth Fund of America . . 1005 1205 1305 1505 1405
The Income Fund of America . . 1006 1206 1306 1506 1406
The Investment Company of
America . . . . . . . . . . . . 1004 1204 1304 1504 1404
The New Economy Fund . . . . . 1014 1214 1314 1514 1414
New Perspective Fund . . . . . 1007 1207 1307 1507 1407
New World Fund . . . . . . . . 1036 1236 1336 1536 1436
SMALLCAP World Fund . . . . . . 1035 1235 1335 1535 1435
Washington Mutual Investors Fund
. . . . . . . . . . . . . . . 1001 1201 1301 1501 1401
BOND FUNDS
American High-Income Trust . . 1021 1221 1321 1521 1421
The Bond Fund of America . . . 1008 1208 1308 1508 1408
Capital World Bond Fund . . . . 1031 1231 1331 1531 1431
Intermediate Bond Fund of
America . . . . . . . . . . . . 1023 1223 1323 1523 1423
U.S. Government Securities Fund 1022 1222 1322 1522 1422
MONEY MARKET FUND
The Cash Management Trust of
America . . . . . . . . . . . . 1009 1209 1309 1509 1409

AMCAP Fund -- Page 52
<PAGE>

FUND NUMBERS
----------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5
-------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . . 2102 2202 2302 2402 2502
American Balanced Fund . . . . . . . 2111 2211 2311 2411 2511
American Mutual Fund . . . . . . . . 2103 2203 2303 2403 2503
Capital Income Builder . . . . . . . 2112 2212 2312 2412 2512
Capital World Growth and Income Fund 2133 2233 2333 2433 2533
EuroPacific Growth Fund . . . . . . 2116 2216 2316 2416 2516
Fundamental Investors . . . . . . . 2110 2210 2310 2410 2510
The Growth Fund of America . . . . . 2105 2205 2305 2405 2505
The Income Fund of America . . . . . 2106 2206 2306 2406 2506
The Investment Company of America . 2104 2204 2304 2404 2504
The New Economy Fund . . . . . . . . 2114 2214 2314 2414 2514
New Perspective Fund . . . . . . . . 2107 2207 2307 2407 2507
New World Fund . . . . . . . . . . . 2136 2236 2336 2436 2536
SMALLCAP World Fund . . . . . . . . 2135 2235 2335 2435 2535
Washington Mutual Investors Fund . . 2101 2201 2301 2401 2501
BOND FUNDS
American High-Income Municipal Bond
Fund . . . . . . . . . . . . . . . . N/A N/A N/A N/A 2540
American High-Income Trust . . . . . 2121 2221 2321 2421 2521
The Bond Fund of America . . . . . . 2108 2208 2308 2408 2508
Capital World Bond Fund . . . . . . 2131 2231 2331 2431 2531
Intermediate Bond Fund of America . 2123 2223 2323 2423 2523
Limited Term Tax-Exempt Bond Fund of
America. . . . . . . . . . . . . . . N/A N/A N/A N/A 2543
The Tax-Exempt Bond Fund of America N/A N/A N/A N/A 2519
The Tax-Exempt Fund of California* . N/A N/A N/A N/A 2520
The Tax-Exempt Fund of Maryland* . . N/A N/A N/A N/A 2524
The Tax-Exempt Fund of Virginia* . . N/A N/A N/A N/A 2525
U.S. Government Securities Fund . . 2122 2222 2322 2422 2522
MONEY MARKET FUNDS
The Cash Management Trust of America 2109 2209 2309 2409 2509
The Tax-Exempt Money Fund of America N/A N/A N/A N/A 2539
The U.S. Treasury Money Fund of
America . . . . . . . . . . . . . . 2149 2249 2349 2449 2549
___________
*Qualified for sale only in certain
jurisdictions.

AMCAP Fund -- Page 53
<PAGE>

APPENDIX

The following descriptions of debt security ratings are based on information
provided by Moody's Investors Service and Standard & Poor's Corporation.

DESCRIPTION OF BOND RATINGS

MOODY'S
LONG-TERM RATING DEFINITIONS

Aaa
Obligations rated Aaa are judged to be of the highest quality, with minimal
credit risk.

Aa
Obligations rated Aa are judged to be of high quality and are subject to very
low credit risk.

A
Obligations rated A are considered upper-medium grade and are subject to low
credit risk.

Baa
Obligations rated Baa are subject to moderate credit risk. They are considered
medium-grade and as such may possess certain speculative characteristics.

Ba
Obligations rated Ba are judged to have speculative elements and are subject to
substantial credit risk.

B
Obligations rated B are considered speculative and are subject to high credit
risk.

Caa
Obligations rated Caa are judged to be of poor standing and are subject to very
high credit risk.

Ca
Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.

C
Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.

NOTE: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

AMCAP Fund -- Page 54
<PAGE>

STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

AAA
An obligation rated AAA has the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA
An obligation rated AA differs from the highest-rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A
An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB
An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC, AND C
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB
An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B
An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC
An obligation rated CCC is currently vulnerable to nonpayment and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC
An obligation rated CC is currently highly vulnerable to nonpayment.

AMCAP Fund -- Page 55
<PAGE>

C
The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D
An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.

PLUS (+) OR MINUS (-)
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.

AMCAP Fund -- Page 56

[logo - AMERICAN FUNDS (r)]




AMCAP FUND
INVESTMENT PORTFOLIO

February 28, 2005





                                                                                                                        Market value
Common stocks -- 81.12%                                                                                      Shares            (000)

CONSUMER DISCRETIONARY -- 20.93%
Lowe's Companies, Inc.                                                                                    7,100,000      $   417,338
Target Corp.                                                                                              5,475,000          278,240
Best Buy Co., Inc.                                                                                        4,925,000          266,049
Time Warner Inc.(1)                                                                                      11,647,500          200,686
Liberty Media Corp., Class A(1)                                                                          18,200,000          184,548
Carnival Corp., units                                                                                     3,335,200          181,368
Harley-Davidson Motor Co.                                                                                 2,871,900          177,713
Kohl's Corp.(1)                                                                                           3,625,000          173,529
Outback Steakhouse, Inc.(2)                                                                               3,710,000          166,616
IAC/InterActiveCorp(1)                                                                                    7,270,000          163,575
Johnson Controls, Inc.                                                                                    2,690,000          158,979
Ross Stores, Inc.                                                                                         5,175,000          144,900
Michaels Stores, Inc.                                                                                     4,010,000          127,879
Comcast Corp., Class A, special nonvoting stock(1)                                                        2,500,000           79,650
Comcast Corp., Class A(1)                                                                                 1,200,000           39,060
Brinker International, Inc.(1)                                                                            2,725,000          103,168
Garmin Ltd.                                                                                               1,998,600          102,428
Williams-Sonoma, Inc.(1)                                                                                  2,880,300           99,918
Gentex Corp.                                                                                              2,700,000           91,557
Dollar General Corp.                                                                                      4,250,000           90,227
Walt Disney Co.                                                                                           3,000,000           83,820
Sonic Corp.(1)                                                                                            2,450,000           82,540
Panera Bread Co., Class A(1)                                                                              1,480,000           79,121
Starbucks Corp.(1)                                                                                        1,470,000           76,161
CarMax, Inc.(1)                                                                                           2,000,000           66,000
Clear Channel Communications, Inc.                                                                        1,950,000           64,896
eBay Inc.(1)                                                                                              1,400,000           59,976
Interpublic Group of Companies, Inc.(1)                                                                   3,634,000           47,751
Liberty Media International, Inc., Class A(1)                                                             1,048,058           45,308
International Game Technology                                                                               850,000           25,891
Gap, Inc.                                                                                                   850,000           18,130
                                                                                                                           3,897,022

HEALTH CARE -- 15.69%
WellPoint, Inc.(1)                                                                                        2,911,900          355,427
Express Scripts, Inc.(1)                                                                                  2,900,000          218,341
Medtronic, Inc.                                                                                           3,920,000          204,310
HCA Inc.                                                                                                  4,305,000          203,239
Medco Health Solutions, Inc.(1)                                                                           4,375,000          194,338
Forest Laboratories, Inc.(1)                                                                              4,025,000          171,867
Eli Lilly and Co.                                                                                         2,840,000          159,040
Guidant Corp.                                                                                             1,960,000          143,844
Biogen Idec Inc.(1)                                                                                       3,372,500          130,347
Medicis Pharmaceutical Corp., Class A(2)                                                                  3,625,000          125,208
Lincare Holdings Inc.(1)                                                                                  3,000,000          121,740
Bristol-Myers Squibb Co.                                                                                  4,225,000          105,752
St. Jude Medical, Inc.(1)                                                                                 2,652,800          103,724
Caremark Rx, Inc.(1)                                                                                      2,700,000          103,356
Amgen Inc.(1)                                                                                             1,615,000           99,500
Becton, Dickinson and Co.                                                                                 1,650,000           98,786
AmerisourceBergen Corp.                                                                                   1,600,000           95,840
Cephalon, Inc.(1)                                                                                         1,500,000           73,605
IDEXX Laboratories, Inc.(1)                                                                               1,314,200           72,872
Genentech, Inc.(1)                                                                                          600,000           28,320
Barr Pharmaceuticals, Inc.(1)                                                                               500,000           23,870
Abbott Laboratories                                                                                         500,000           22,995
Applera Corp. - Applied Biosystems Group                                                                  1,000,000           20,540
Henry Schein, Inc.(1)                                                                                       250,000           18,085
ResMed Inc(1)                                                                                               300,000           17,685
Kinetic Concepts, Inc.(1)                                                                                   100,800            6,575
Schering-Plough Corp.                                                                                       139,100            2,636
                                                                                                                           2,921,842

INFORMATION TECHNOLOGY -- 13.40%
First Data Corp.                                                                                          6,919,825          283,851
Microsoft Corp.                                                                                           7,820,000          196,908
Cisco Systems, Inc.(1)                                                                                    9,829,300          171,226
Applied Materials, Inc.(1)                                                                                8,450,000          147,875
Analog Devices, Inc.                                                                                      3,150,000          115,668
Texas Instruments Inc.                                                                                    4,050,000          107,204
Automatic Data Processing, Inc.                                                                           2,400,000          103,104
Google Inc., Class A(1)                                                                                     500,000           93,995
Intuit Inc.(1)                                                                                            2,154,300           92,204
Symbol Technologies, Inc.                                                                                 4,500,000           79,785
Xilinx, Inc.                                                                                              2,500,000           75,500
Microchip Technology Inc.                                                                                 2,500,000           68,650
National Instruments Corp.                                                                                2,343,750           66,938
Linear Technology Corp.                                                                                   1,700,000           66,402
Sanmina-SCI Corp.(1)                                                                                     11,850,000           65,767
Solectron Corp.(1)                                                                                       13,140,000           65,043
Sabre Holdings Corp., Class A                                                                             2,888,800           60,896
Altera Corp.(1)                                                                                           2,850,000           59,109
Jabil Circuit, Inc.(1)                                                                                    2,287,000           58,799
Yahoo! Inc.(1)                                                                                            1,811,200           58,447
Intersil Corp., Class A                                                                                   3,400,000           57,324
Paychex, Inc.                                                                                             1,600,000           51,088
NAVTEQ Corp.(1)                                                                                           1,122,100           49,036
Ceridian Corp.(1)                                                                                         2,400,000           43,800
Maxim Integrated Products, Inc.                                                                           1,000,000           43,020
EMC Corp.(1)                                                                                              3,350,000           42,411
Power Integrations, Inc.(1,2)                                                                             1,850,000           39,294
Oracle Corp.(1)                                                                                           3,000,000           38,730
KLA-Tencor Corp.(1)                                                                                         700,000           34,587
Rogers Corp.(1)                                                                                             750,000           34,245
Cadence Design Systems, Inc.(1)                                                                           1,685,800           23,230
                                                                                                                           2,494,136


FINANCIALS -- 8.35%
Fannie Mae                                                                                                5,715,000          334,099
American International Group, Inc.                                                                        4,615,000          308,282
Capital One Financial Corp.                                                                               3,401,200          260,804
Freddie Mac                                                                                               2,300,000          142,600
Wells Fargo & Co.                                                                                         2,020,000          119,948
M&T Bank Corp.                                                                                              959,230           94,973
MBNA Corp.                                                                                                2,700,000           68,499
Independence Community Bank Corp.                                                                         1,656,000           65,925
Bank of New York Co., Inc.                                                                                1,740,000           52,635
City National Corp.                                                                                         510,000           34,910
Southwest Bancorporation of Texas, Inc.                                                                   1,400,000           26,670
Fidelity National Financial, Inc.                                                                           600,000           26,544
Arthur J. Gallagher & Co.                                                                                   600,000           17,916
                                                                                                                           1,553,805

INDUSTRIALS -- 6.93%
Precision Castparts Corp.                                                                                 2,620,000          197,181
Robert Half International Inc.                                                                            6,500,000          189,605
United Parcel Service, Inc., Class B                                                                      2,100,000          162,729
General Dynamics Corp.                                                                                    1,540,000          162,239
Southwest Airlines Co.                                                                                    9,765,000          135,246
General Electric Co.                                                                                      3,750,000          132,000
Avery Dennison Corp.                                                                                      1,744,200          105,873
FedEx Corp.                                                                                                 790,000           77,246
ChoicePoint Inc.(1)                                                                                       1,000,000           40,300
United Technologies Corp.                                                                                   400,000           39,952
Jacobs Engineering Group Inc.(1)                                                                            500,200           28,001
Education Management Corp.(1)                                                                               700,000           20,524
                                                                                                                           1,290,896

CONSUMER STAPLES -- 5.50%
Avon Products, Inc.                                                                                       4,080,000          174,502
Altria Group, Inc.                                                                                        2,500,000          164,125
PepsiCo, Inc.                                                                                             2,715,000          146,230
Walgreen Co.                                                                                              2,850,000          122,066
Dean Foods Co.(1)                                                                                         2,300,000           79,465
Anheuser-Busch Companies, Inc.                                                                            1,545,000           73,310
Costco Wholesale Corp.                                                                                    1,500,000           69,885
Wal-Mart Stores, Inc.                                                                                     1,000,000           51,610
Constellation Brands, Inc., Class A(1)                                                                      915,000           48,980
Gillette Co.                                                                                                700,000           35,175
Procter & Gamble Co.                                                                                        600,000           31,854
Performance Food Group Co.(1)                                                                             1,010,000           27,411
                                                                                                                           1,024,613

ENERGY -- 5.35%
Devon Energy Corp.                                                                                        5,970,000          279,336
Smith International, Inc.(1)                                                                              2,715,000          174,466
Apache Corp.                                                                                              2,150,000          135,192
Schlumberger Ltd.                                                                                         1,590,000          119,966
Noble Corp.                                                                                               1,823,400          104,061
FMC Technologies, Inc.(1)                                                                                 2,735,000           94,467
ENSCO International Inc.                                                                                  1,100,000           44,308
Pogo Producing Co.                                                                                          900,000           43,749
                                                                                                                             995,545

TELECOMMUNICATION SERVICES -- 1.23%
Telephone and Data Systems, Inc.                                                                          1,575,000          137,812
CenturyTel, Inc.                                                                                          2,690,000           90,492
                                                                                                                             228,304

MATERIALS -- 0.95%
Sealed Air Corp.(1)                                                                                       1,200,000           62,724
International Flavors & Fragrances Inc.                                                                   1,500,000           61,935
Cambrex Corp.                                                                                             1,300,000           29,497
Vulcan Materials Co.                                                                                        400,000           23,144
                                                                                                                             177,300

UTILITIES -- 0.19%
Duke Energy Corp.                                                                                         1,299,000           35,060


MISCELLANEOUS -- 2.60%
Other common stocks in initial period of acquisition                                                                         483,858


TOTAL COMMON STOCKS (COST: $11,916,060,000)                                                                               15,102,381



                                                                                                   Principal amount
Short-term securities -- 19.06%                                                                                (000)

Federal Home Loan Bank 2.32%-2.525% due 3/4-4/15/2005                                                      $214,900          214,519
U.S. Treasury Bills 2.123%-2.275% due 3/10-4/7/2005                                                         182,800          182,559
Coca-Cola Co. 2.45%-2.55% due 3/21-4/14/2005                                                                164,300          163,897
Wal-Mart Stores Inc. 2.41%-2.50% due 3/8-4/12/2005(3)                                                       150,500          150,225
Variable Funding Capital Corp. 2.52%-2.66% due 3/4-4/21/2005(3)                                             150,000          149,657
Bank of America Corp. 2.51%-2.61% due 4/6-4/11/2005                                                         150,000          149,576
DuPont (E.I.) de Nemours & Co. 2.30%-2.52% due 3/3-3/30/2005                                                147,107          146,921
Clipper Receivables Co., LLC 2.51%-2.53% due 3/9-3/30/2005(3)                                               145,000          144,820
Preferred Receivables Funding Corp. 2.48%-2.56% due 3/16-3/28/2005(3)                                        90,000           89,865
J.P. Morgan Chase & Co. 2.45% due 3/11/2005                                                                  50,000           49,963
CAFCO, LLC 2.45%-2.50% due 3/10-3/21/2005(3)                                                                 76,400           76,314
Ciesco LLC 2.40% due 3/2/2005                                                                                50,000           49,993
Wells Fargo & Co. 2.45%-2.50% due 3/1-3/15/2005                                                             120,000          120,000
Freddie Mac 2.38%-2.45% due 3/14-3/22/2005                                                                  109,050          108,922
Three Pillars Funding, LLC 2.53%-2.54% due 3/1-3/18/2005(3)                                                 106,278          106,215
IBM Credit Corp. 2.32% due 3/7/2005                                                                          50,000           49,977
IBM Capital Inc. 2.53% due 3/24/2005(3)                                                                      50,000           49,916
International Bank for Reconstruction and Development 2.31% due 3/16/2005                                   100,000           99,887
Exxon Asset Management Co. 2.48% due 3/22-3/23/2005(3)                                                      100,000           99,845
FCAR Owner Trust I 2.46%-2.60% due 3/8-4/13/2005                                                            100,000           99,795
Procter & Gamble Co. 2.37%-2.77% due 3/14-5/25/2005(3)                                                       99,700           99,431
BellSouth Corp. 2.49%-2.50% due 3/29-4/1/2005(3)                                                             95,000           94,800
Edison Asset Securitization LLC 2.45% due 3/18-3/23/2005(3)                                                  61,180           61,093
General Electric Capital Services, Inc. 2.40% due 3/8/2005                                                   20,800           20,789
Hewlett-Packard Co. 2.51%-2.66% due 3/15-4/25/2005(3)                                                        75,000           74,770
New Center Asset Trust Plus 2.51%-2.61% due 3/9-4/18/2005                                                    70,000           69,813
Gannett Co. 2.44%-2.57% due 3/8-4/19/2005(3)                                                                 65,700           65,599
Anheuser-Busch Cos. Inc. 2.30%-2.39% due 3/9-3/11/2005(3)                                                    65,000           64,956
Triple-A One Funding Corp. 2.51%-2.54% due 3/22-3/28/2005(3)                                                 61,382           61,276
Abbott Laboratories Inc. 2.50%-2.57% due 3/23-4/5/2005(3)                                                    52,800           52,684
Caterpillar Financial Services Corp. 2.48%-2.49% due 3/21-3/28/2005                                          51,400           51,315
Colgate-Palmolive Co. 2.48%-2.53% due 3/1-3/30/2005(3)                                                       50,568           50,513
Fannie Mae 2.42% due 3/22/2005                                                                               50,000           49,933
ChevronTexaco Funding Corp. 2.47% due 3/28/2005                                                              50,000           49,904
3M Co. 2.35%-2.61% due 3/1-4/20/2005                                                                         46,905           46,796
SBC Communications Inc. 2.37% due 3/7/2005(3)                                                                46,000           45,979
Tennessee Valley Authority 2.32%-2.34% due 3/3-3/17/2005                                                     34,000           33,983
American Express Credit Corp. 2.50% due 3/21/2005                                                            30,000           29,956
USAA Capital Corp. 2.47% due 3/2/2005                                                                        25,000           24,997
First Data Corp. 2.49% due 3/3/2005                                                                          25,000           24,995
Eli Lilly and Co. 2.47% due 3/8/2005(3)                                                                      25,000           24,986
NetJets Inc. 2.36% due 3/18/2005(3)                                                                          25,000           24,970
Hershey Foods Corp. 2.51% due 3/31/2005(3)                                                                   25,000           24,946
Harvard University 2.51% due 4/8/2005                                          .                             25,000           24,932
Federal Farm Credit Banks 2.36% due 3/23/2005                                                                21,500           21,468
Medtronic Inc. 2.44% due 3/10/2005(3)                                                                        20,000           19,986
PepsiCo Inc. 2.49% due 3/3/2005(3)                                                                           17,600           17,596
Harley-Davidson Funding Corp. 2.55% due 4/7/2005(3)                                                          11,650           11,619


TOTAL SHORT-TERM SECURITIES (COST: $3,546,891,000)                                                                         3,546,951

TOTAL INVESTMENT SECURITIES (COST: $15,462,951,000)                                                                       18,649,332
OTHER ASSETS LESS LIABILITIES                                                                                               (33,076)

NET ASSETS                                                                                                               $18,616,256




"Miscellaneous" securities include holdings in their initial period of
acquisition that have not previously been publicly disclosed.

(1)  Security did not produce income during the last 12 months.

(2)  Represents an affiliated company as defined under the Investment Company
     Act of 1940.

(3)  Restricted security that can be resold only to institutional
     investors.  In practice,  these  securities are typically as
     liquid as  unrestricted  securities  in the  portfolio.  The
     total value of all restricted securities was $1,662,062,000,
     which represented 8.93% of the net assets of the fund.

See Notes to Financial Statements


FINANCIAL STATEMENTS




Statement of assets and liabilities
at February 28, 2005                                                     (dollars and shares in thousands, except per-share amounts)

ASSETS:
 Investment securities at market:
  Unaffiliated issuers (cost: $15,172,310)                                                $18,318,214
  Affiliated issuers (cost: $290,641)                                                         331,118              $18,649,332
 Cash                                                                                                                       93
 Receivables for:
  Sales of fund's shares                                                                       63,206
  Dividends and interest                                                                       11,726                   74,932
                                                                                                                    18,724,357
LIABILITIES:
 Payables for:
  Purchases of investments                                                                     70,878
  Repurchases of fund's shares                                                                 19,470
  Investment advisory services                                                                  4,427
  Services provided by affiliates                                                              11,977
  Deferred Directors' compensation                                                              1,274
  Other fees and expenses                                                                          75                  108,101
NET ASSETS AT FEBRUARY 28, 2005                                                                                    $18,616,256

NET ASSETS CONSIST OF:
 Capital paid in on shares of capital stock                                                                        $15,192,598
 Distributions in excess of net investment income                                                                       (1,274)
 Undistributed net realized gain                                                                                       238,551
 Net unrealized appreciation                                                                                         3,186,381
NET ASSETS AT FEBRUARY 28, 2005                                                                                    $18,616,256







TOTAL AUTHORIZED CAPITAL STOCK - 2,000,000 SHARES, $1.00 PAR VALUE (1,038,488 TOTAL SHARES OUTSTANDING)

                                                                  Net assets       Shares outstanding   Net asset value per share(1)

Class A                                                           $13,349,583             740,954                  $18.02
Class B                                                               984,127              56,294                  17.48
Class C                                                             1,262,346              72,583                  17.39
Class F                                                             1,512,752              84,303                  17.94
Class 529-A                                                           224,211              12,463                  17.99
Class 529-B                                                            56,021               3,187                  17.58
Class 529-C                                                            76,277               4,336                  17.59
Class 529-E                                                            13,583                 761                  17.85
Class 529-F                                                             5,732                 319                  17.99
Class R-1                                                              23,489               1,328                  17.69
Class R-2                                                             245,170              13,881                  17.66
Class R-3                                                             421,517              23,606                  17.86
Class R-4                                                             167,797               9,329                  17.99
Class R-5                                                             273,651              15,144                  18.07

(1)  Maximum offering price and redemption price per share were equal to the net
     asset  value  per share for all share  classes,  except  for  classes A and
     529-A,  for which the  maximum  offering  prices per share were  $19.12 and
     $19.09, respectively.


See Notes to Financial Statements




STATEMENT OF OPERATIONS for the year ended February 28, 2005

INVESTMENT INCOME:
 Income:                                                                                                      (dollars in thousands)
  Dividends (also includes $2,039 from affiliates)                                       $123,213
  Interest                                                                                 47,978                 $171,191

 Fees and expenses:
  Investment advisory services                                                             53,852
  Distribution services                                                                    54,040
  Transfer agent services                                                                  14,255
  Administrative services                                                                   6,854
  Reports to shareholders                                                                     431
  Registration statement and prospectus                                                     1,091
  Postage, stationery and supplies                                                          1,791
  Directors' compensation                                                                     312
  Auditing and legal                                                                          182
  Custodian                                                                                   111
  State and local taxes                                                                       124
  Other                                                                                       127
  Total expenses before reimbursement/waiver                                              133,170
   Reimbursement/waiver of expenses                                                         1,806                  131,364
 Net investment income                                                                                              39,827

NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS:
 Net realized gain on investments (includes $1,099 net gain from affiliates)                                       442,289
 Net unrealized appreciation on investments                                                                        212,227
  Net realized gain and unrealized appreciation on investments                                                     654,516
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                                              $694,343



See Notes to Financial Statements





STATEMENT OF CHANGES IN NET ASSETS                                                                            (dollars in thousands)

                                                                                        Year ended                Year ended
                                                                                       February 28,              February 29,
                                                                                           2005                      2004
OPERATIONS:
 Net investment income                                                                    $39,827                   $2,194
 Net realized gain on investments                                                         442,289                  106,725
 Net unrealized appreciation on investments                                               212,227                3,125,418
  Net increase in net assets
   resulting from operations                                                              694,343                3,234,337

DIVIDENDS AND DISTRIBUTIONS PAID TO SHAREHOLDERS:
 Dividends from net investment income                                                     (34,346)                  (1,999)
 Distributions from net realized gain on investments                                     (123,204)                       -
  Total dividends and distributions paid to shareholders                                 (157,550)                  (1,999)

CAPITAL SHARE TRANSACTIONS                                                              3,686,135                3,484,267

TOTAL INCREASE IN NET ASSETS                                                            4,222,928                6,716,605

NET ASSETS:
 Beginning of year                                                                     14,393,328                7,676,723
 End of year (including distributions in excess of and undistributed
  net investment income: $(1,274) and $1,418, respectively)                           $18,616,256              $14,393,328



See Notes to Financial Statements




NOTES TO FINANCIAL STATEMENTS


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - AMCAP Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The fund seeks long-term growth of capital by investing in U.S. companies with a
record of superior growth.

The fund offers 14 share classes consisting of four retail share classes, five
CollegeAmerica(R) savings plan share classes and five retirement plan share
classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C,
529-E and 529-F) are sponsored by the Commonwealth of Virginia and can be
utilized to save for college education. The five retirement plan share classes
(R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry
any conversion rights. The fund's share classes are described below:




SHARE CLASS                   INITIAL SALES CHARGE       CONTINGENT DEFERRED SALES        CONVERSION FEATURE
                                                           CHARGE UPON REDEMPTION

Classes A and 529-A            Up to 5.75%                  None (except 1% for                 None
                                                            certain redemptions
                                                            within one year of
                                                            purchase without an
                                                            initial sales charge)

Classes B and 529-B              None                       Declines from 5% to zero            Classes B and 529-B convert to
                                                            for redemptions within              classes A and 529-A,
                                                            six years of purchase               respectively, after eight years

Class C                          None                       1% for redemptions within           Class C converts to Class F
                                                            one year of purchase                after 10 years

Class 529-C                      None                       1% for redemptions within           None
                                                            one year of purchase

Class 529-E                      None                       None                                None

Classes F and 529-F              None                       None                                None

Classes R-1, R-2, R-3,           None                       None                                None
R-4 and R-5



Holders of all share classes have equal pro rata rights to assets, dividends and
liquidation proceeds. Each share class has identical voting rights, except for
the exclusive right to vote on matters affecting only its class. Share classes
have different fees and expenses ("class-specific fees and expenses"), primarily
due to different arrangements for distribution, administrative and shareholder
services. Differences in class-specific fees and expenses will result in
differences in net investment income and, therefore, the payment of different
per-share dividends by each class.

CollegeAmerica is a registered trademark of the Virginia College Savings Plan.
(SM)

SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared to
comply with accounting principles generally accepted in the United States of
America. These principles require management to make estimates and assumptions
that affect reported amounts and disclosures. Actual results could differ from
those estimates. The following is a summary of the significant accounting
policies followed by the fund:

         SECURITY VALUATION - Equity securities are valued at the official
         closing price of, or the last reported sale price on, the exchange or
         market on which such securities are traded, as of the close of business
         on the day the securities are being valued or, lacking any sales, at
         the last available bid price. Prices for each security are taken from
         the principal exchange or market in which the security trades.
         Fixed-income securities are valued at prices obtained from an
         independent pricing service, when such prices are available. However,
         where the investment adviser deems it appropriate, such securities will
         be valued at the mean quoted bid and asked prices (or bid prices, if
         asked prices are not available) or at prices for securities of
         comparable maturity, quality and type. Securities with both
         fixed-income and equity characteristics, or equity securities traded
         principally among fixed-income dealers, are valued in the manner
         described above for either equity or fixed-income securities, depending
         on which method is deemed most appropriate by the investment adviser.
         Short-term securities purchased within 60 days to maturity are valued
         at amortized cost, which approximates market value. The value of
         short-term securities purchased with greater than 60 days to maturity
         with 60 days or less remaining to maturity is determined based on the
         market value on the 61st day. The ability of the issuers of the debt
         securities held by the fund to meet their obligations may be affected
         by economic developments in a specific industry, state or region.
         Securities and other assets for which representative market quotations
         are not readily available are fair valued as determined in good faith
         under procedures adopted by authority of the fund's Board of Directors.
         Various factors may be reviewed in order to make a good faith
         determination of a security's fair value. These factors include, but
         are not limited to, the type and cost of the security; contractual or
         legal restrictions on resale of the security; relevant financial or
         business developments of the issuer; actively traded similar or related
         securities; conversion or exchange rights on the security; related
         corporate actions; and changes in overall market conditions.

CollegeAmerica is a registered trademark of the Virginia College Savings
Plan./sm/

         SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
         transactions are recorded by the fund as of the date the trades are
         executed with brokers. Realized gains and losses from security
         transactions are determined based on the specific identified cost of
         the securities. Dividend income is recognized on the ex-dividend date
         and interest income is recognized on an accrual basis.

         CLASS ALLOCATIONS - Income, fees and expenses (other than
         class-specific fees and expenses) and realized and unrealized gains and
         losses are allocated daily among the various share classes based on
         their relative net assets. Class-specific fees and expenses, such as
         distribution, administrative and shareholder services, are charged
         directly to the respective share class.

         DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and
         distributions paid to shareholders are recorded on the ex-dividend
         date.

2. FEDERAL INCOME TAXATION AND DISTRIBUTIONS

The fund complies with the requirements under Subchapter M of the Internal
Revenue Code applicable to mutual funds and intends to distribute substantially
all of its net taxable income and net capital gains each year. The fund is not
subject to income taxes to the extent such distributions are made.

DISTRIBUTIONS - Distributions paid to shareholders are based on net investment
income and net realized gains determined on a tax basis, which may differ from
net investment income and net realized gains for financial reporting purposes.
These differences are due primarily to differing treatment for items such as
short-term capital gains and losses; capital losses related to sales of certain
securities within 30 days of purchase; deferred expenses; cost of investments
sold; and net capital losses. The fiscal year in which amounts are distributed
may differ from the year in which the net investment income and net realized
gains are recorded by the fund. The fund may also designate a portion of the
amount paid to redeeming shareholders as a distribution for tax purposes. As of
February 28, 2005, the cost of investment securities for federal income tax
purposes was $15,464,513,000.

As of February 28, 2005, the components of distributable earnings on a tax basis
were as follows (dollars in thousands):

Undistributed long-term capital gains                                  $240,114

Gross unrealized appreciation on investment securities                3,563,937

Gross unrealized depreciation on investment securities                 (379,118)

Net unrealized appreciation on investment securities                   3,184,819


At the beginning of the period, the fund had a capital loss carryforward of
$67,938,000 expiring in 2011. The capital loss carryforward was utilized to
offset capital gains realized during the current year. During the year ended
February 28, 2005, the fund realized, on a tax basis, a net capital gain of
$442,112,000, which was offset by capital losses of $10,856,000 that were
realized during the period November 1, 2003 through February 29, 2004.

During the year ended February 28, 2005, the fund reclassified $8,173,000 from
undistributed net investment income to other paid in capital to align financial
reporting with tax reporting.

The tax character of distributions paid to shareholders was as follows (dollars
in thousands):





                                                                  YEAR ENDED FEBRUARY 28, 2005

                                                                              LONG-TERM                     TOTAL
Share class                                    ORDINARY INCOME              CAPITAL GAINS             DISTRIBUTIONS PAID
Class A                                            $ 31,410                   $ 89,230                    $ 120,640
Class B                                                   -                      6,795                        6,795
Class C                                                   -                      8,483                        8,483
Class F                                               1,614                      9,563                       11,177
Class 529-A                                             199                      1,359                        1,558
Class 529-B                                               -                        367                          367
Class 529-C                                               -                        486                          486
Class 529-E                                               -                         84                           84
Class 529-F                                               -                         34                           34
Class R-1                                                 -                        140                          140
Class R-2                                                 -                      1,515                        1,515
Class R-3                                                 -                      2,532                        2,532
Class R-4                                                58                        963                        1,021
Class R-5                                             1,065                      1,653                        2,718
Total                                              $ 34,346                  $ 123,204                    $ 157,550


                                                                   YEAR ENDED FEBRUARY 29, 2004

                                                                                LONG-TERM                     TOTAL
Share class                               ORDINARY INCOME                     CAPITAL GAINS            DISTRIBUTIONS PAID
Class A                                             $ 1,750                        $ -                      $ 1,750
Class B                                                   -                          -                            -
Class C                                                   -                          -                            -
Class F                                                 149                          -                          149
Class 529-A                                              27                          -                           27
Class 529-B                                               -                          -                            -
Class 529-C                                               -                          -                            -
Class 529-E                                               -                          -                            -
Class 529-F                                               -(*)                       -                            -(*)
Class R-1                                                 2                          -                            2
Class R-2                                                 1                          -                            1
Class R-3                                                13                          -                           13
Class R-4                                                17                          -                           17
Class R-5                                                40                          -                           40
Total                                               $ 1,999                        $ -                      $ 1,999

(*) Amount less than one thousand.




3. FEES AND TRANSACTIONS WITH RELATED PARTIES

Capital Research and Management Company ("CRMC"), the fund's investment adviser,
is the parent company of American Funds Service Company ("AFS"), the fund's
transfer agent, and American Funds Distributors, Inc. ("AFD"), the principal
underwriter of the fund's shares.

INVESTMENT ADVISORY SERVICES - The Investment Advisory and Service Agreement
with CRMC provides for monthly fees accrued daily. These fees are based on a
declining series of annual rates beginning with 0.485% on the first $1 billion
of daily net assets and decreasing to 0.295% on such assets in excess of $21
billion. During the year ended February 28, 2005, CRMC reduced investment
advisory services fees by $1,419,000. As a result, the fee shown on the
accompanying financial statements of $53,852,000, which was equivalent to an
annualized rate of 0.331%, was reduced to $52,433,000, or 0.322% of average
daily net assets.

CLASS-SPECIFIC FEES AND EXPENSES - Expenses that are specific to individual
share classes are accrued directly to the respective share class. The principal
class-specific fees and expenses are described below:

         DISTRIBUTION SERVICES - The fund has adopted plans of distribution for
         all share classes, except Class R-5. Under the plans, the Board of
         Directors approves certain categories of expenses that are used to
         finance activities primarily intended to sell fund shares. The plans
         provide for annual expenses, based on a percentage of average daily net
         assets, ranging from 0.25% to 1.00% as noted on the following page. In
         some cases, the Board of Directors has approved expense amounts lower
         than plan limits. All share classes may use up to 0.25% of average
         daily net assets to pay service fees, or to compensate AFD for paying
         service fees, to firms that have entered into agreements with AFD for
         providing certain shareholder services. Expenses in excess of these
         amounts, up to approved limits, may be used to compensate dealers and
         wholesalers for shares sold.

         For classes A and 529-A, the Board of Directors has also approved the
         reimbursement of dealer and wholesaler commissions paid by AFD for
         certain shares sold without a sales charge. Each class reimburses AFD
         for amounts billed within the prior 15 months but only to the extent
         that the overall annual expense limit of 0.25% is not exceeded. As of
         February 28, 2005, there were no unreimbursed expenses subject to
         reimbursement for classes A or 529-A.





         SHARE CLASS                                       CURRENTLY APPROVED LIMITS            PLAN LIMITS

         Class A                                                      0.25%                         0.25%

         Class 529-A                                                  0.25                          0.50

         Classes B and 529-B                                          1.00                          1.00

         Classes C, 529-C and R-1                                     1.00                          1.00

         Class R-2                                                    0.75                          1.00

         Classes 529-E and R-3                                        0.50                          0.75

         Classes F, 529-F and R-4                                     0.25                          0.50



         TRANSFER AGENT SERVICES - The fund has a transfer agent agreement with
         AFS for classes A and B. Under this agreement, these share classes
         compensate AFS for transfer agent services including shareholder
         recordkeeping, communications and transaction processing. AFS is also
         compensated for certain transfer agent services provided to all other
         share classes from the administrative services fees paid to CRMC
         described below.

         ADMINISTRATIVE SERVICES - The fund has an administrative services
         agreement with CRMC to provide transfer agent and other related
         shareholder services for all classes of shares other than classes A and
         B. Each relevant class pays CRMC annual fees of 0.15% (0.10% for Class
         R-5) based on its respective average daily net assets. Each relevant
         class also pays AFS additional amounts for certain transfer agent
         services. CRMC and AFS may use these fees to compensate third parties
         for performing these services. During the year ended February 28, 2005,
         CRMC agreed to pay a portion of these fees for classes R-1 and R-2. For
         the year ended February 28, 2005, the total fees paid by CRMC were
         $3,000 and $384,000 for Class R-1 and Class R-2, respectively.
         Administrative services fees are presented gross of any payments made
         by CRMC. Each 529 share class is subject to an additional annual
         administrative services fee of 0.10% of its respective average daily
         net assets; this fee is payable to the Commonwealth of Virginia for the
         maintenance of the CollegeAmerica plan. Although these amounts are
         included with administrative services fees in the accompanying
         financial statements, the Commonwealth of Virginia is not considered a
         related party.

         Expenses under the agreements described above for the year ended
         February 28, 2005, were as follows (dollars in thousands):





           SHARE CLASS    DISTRIBUTION    TRANSFER AGENT                     ADMINISTRATIVE SERVICES
                            SERVICES         SERVICES

                                                                     CRMC              TRANSFER AGENT         COMMONWEALTH OF
                                                                ADMINISTRATIVE           SERVICES                VIRGINIA
                                                                   SERVICES                                   ADMINISTRATIVE
                                                                                                                 SERVICES

             Class A         $27,143          $13,228           Not applicable        Not applicable          Not applicable

             Class B          8,678            1,027            Not applicable        Not applicable          Not applicable

             Class C         10,533          Included               $1,580                 $290               Not applicable
                                                in
                                          administrative
                                             services

             Class F          3,035          Included                1,821                  143               Not applicable
                                                in
                                          administrative
                                             services

           Class 529-A         248           Included                 255                    30                     $170
                                                in
                                          administrative
                                             services

           Class 529-B         459           Included                  69                    25                       46
                                                in
                                          administrative
                                             services

           Class 529-C         601           Included                  90                    26                       60
                                                in
                                          administrative
                                             services

           Class 529-E         53            Included                  16                     2                       11
                                                in
                                          administrative
                                             services

           Class 529-F         11            Included                   7                     1                        4
                                                in
                                          administrative
                                             services

            Class R-1          168           Included                 25                     12                Not applicable
                                                in
                                          administrative
                                             services

            Class R-2         1,372          Included                274                    872                Not applicable
                                                in
                                          administrative
                                             services

            Class R-3         1,463          Included                439                    235                Not applicable
                                                in
                                          administrative
                                             services

            Class R-4          276           Included                166                      9                Not applicable
                                                in
                                          administrative
                                             services

            Class R-5    Not applicable      Included                173                      3                Not applicable
                                                in
                                          administrative
                                             services

              Total          $54,040          $14,255               $4,915               $1,648                     $291



DEFERRED DIRECTORS' COMPENSATION - Since the adoption of the deferred
compensation plan in 1993, Directors who are unaffiliated with CRMC may elect to
defer the cash payment of part or all of their compensation. These deferred
amounts, which remain as liabilities of the fund, are treated as if invested in
shares of the fund or other American Funds. These amounts represent general,
unsecured liabilities of the fund and vary according to the total returns of the
selected funds. Directors' compensation of $312,000, shown on the accompanying
financial statements, includes $216,000 in current fees (either paid in cash or
deferred) and a net increase of $96,000 in the value of the deferred amounts.

AFFILIATED OFFICERS AND DIRECTORS - Officers and certain Directors of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated
officers or Directors received any compensation directly from the fund.

4. CAPITAL SHARE TRANSACTIONS

Capital share transactions in the fund were as follows (dollars and shares in
thousands):






Share class                                              Sales(1)                  Reinvestments of dividends and distributions
                                                   Amount       Shares                          Amount    Shares
Year ended February 28, 2005
Class A                                            $3,202,015     183,922                    $ 114,988    6,388
Class B                                               287,369      17,026                        6,534      374
Class C                                               508,556      30,182                        8,086      464
Class F                                               685,307      39,475                       10,183      568
Class 529-A                                            96,472       5,534                        1,558       87
Class 529-B                                            18,906       1,111                          367       21
Class 529-C                                            31,213       1,828                          486       27
Class 529-E                                             5,359         309                           84        5
Class 529-F                                             2,679         153                           34        2
Class R-1                                              15,979         932                          140        8
Class R-2                                             142,782       8,330                        1,515       86
Class R-3                                             278,314      16,067                        2,528      141
Class R-4                                             128,491       7,381                        1,021       56
Class R-5                                             173,592       9,718                        2,694      149
Total net increase
   (decrease)                                      $5,577,034     321,968                    $ 150,218    8,376

Year ended February 29, 2004
Class A                                            $2,726,514     175,093                      $ 1,647      109
Class B                                               338,848      22,398                            -        -
Class C                                               490,789      32,153                            -        -
Class F                                               615,346      39,610                          136        9
Class 529-A                                            69,775       4,430                           27        2
Class 529-B                                            18,873       1,229                            -        -
Class 529-C                                            25,276       1,625                            -        -
Class 529-E                                             4,353         280                            -        -
Class 529-F                                             2,470         154                            -        -
Class R-1                                              11,054         723                            2    -*
Class R-2                                             103,559       6,678                            1    -*
Class R-3                                             164,901      10,441                           13    -*
Class R-4                                              56,417       3,704                           17        1
Class R-5                                              64,761       4,102                           40        3
Total net increase
   (decrease)                                      $4,692,936     302,620                      $ 1,883      124


Share class                                                Repurchases(1)                          Net increase
                                                      Amount        Shares                      Amount      Shares
Year ended February 28, 2005
Class A                                         $ (1,447,417)     (83,011)                  $1,869,586     107,299
Class B                                              (75,571)      (4,465)                     218,332      12,935
Class C                                             (135,629)      (8,029)                     381,013      22,617
Class F                                             (206,673)     (11,931)                     488,817      28,112
Class 529-A                                           (8,290)        (475)                      89,740       5,146
Class 529-B                                           (1,433)         (84)                      17,840       1,048
Class 529-C                                           (3,266)        (190)                      28,433       1,665
Class 529-E                                             (783)         (45)                       4,660         269
Class 529-F                                             (404)         (23)                       2,309         132
Class R-1                                             (4,964)        (292)                      11,155         648
Class R-2                                            (35,337)      (2,056)                     108,960       6,360
Class R-3                                            (60,046)      (3,468)                     220,796      12,740
Class R-4                                            (26,875)      (1,543)                     102,637       5,894
Class R-5                                            (34,429)      (1,964)                     141,857       7,903
Total net increase
   (decrease)                                   $ (2,041,117)    (117,576)                  $3,686,135     212,768

Year ended February 29, 2004
Class A                                           $ (941,332)     (61,174)                  $1,786,829     114,028
Class B                                              (41,976)      (2,801)                     296,872      19,597
Class C                                              (61,622)      (4,108)                     429,167      28,045
Class F                                              (95,136)      (6,141)                     520,346      33,478
Class 529-A                                           (3,082)        (195)                      66,720       4,237
Class 529-B                                             (822)         (52)                      18,051       1,177
Class 529-C                                           (1,447)         (92)                      23,829       1,533
Class 529-E                                             (152)         (10)                       4,201         270
Class 529-F                                              (72)          (4)                       2,398         150
Class R-1                                             (1,606)        (101)                       9,450         622
Class R-2                                            (16,479)      (1,084)                      87,081       5,594
Class R-3                                            (22,734)      (1,440)                     142,180       9,001
Class R-4                                             (8,358)        (522)                      48,076       3,183
Class R-5                                            (15,734)        (987)                      49,067       3,118
Total net increase
   (decrease)                                   $ (1,210,552)     (78,711)                  $3,484,267     224,033



(*)  Amount less than one thousand.

(1)  Includes exchanges between share classes of the fund.


5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

The fund made purchases and sales of investment securities, excluding short-term
securities, of $5,037,331,000 and $2,085,211,000, respectively, during the year
ended February 28, 2005.

The fund receives a reduction in its custodian fee equal to the amount of
interest calculated on certain cash balances held at the custodian bank. For the
year ended February 28, 2005, the custodian fee of $111,000, shown on the
accompanying financial statements, includes $17,000 that was offset by this
reduction, rather than paid in cash.


FINANCIAL HIGHLIGHTS(1)





                                                                               Income (loss) from investment operations(2)
                                                                                                                  Net
                                                  Net asset                                     gains (losses)
                                                    value,                Net                   on securities          Total from
                                                  beginning           investment                (both realized         investment
                                                  of period          income (loss)             and unrealized)         operations
Class A:
 Year ended 2/28/2005                               $17.50               $.06                        $.63                 $.69
 Year ended 2/29/2004                                12.78                .02                        4.70                 4.72
 Year ended 2/28/2003                                15.29                .03                       (2.42)               (2.39)
 Year ended 2/28/2002                                17.24                .09                       (1.24)               (1.15)
 Year ended 2/28/2001                                19.00                .22                        .38                  .60
Class B:
 Year ended 2/28/2005                                17.07               (.07)                       .61                  .54
 Year ended 2/29/2004                                12.56               (.10)                       4.61                 4.51
 Year ended 2/28/2003                                15.12               (.07)                      (2.39)               (2.46)
 Year ended 2/28/2002                                17.14               (.04)                      (1.23)               (1.27)
 Period from 3/15/2000 to 2/28/2001                  19.06                .09                        .31                  .40
Class C:
 Year ended 2/28/2005                                16.99               (.08)                       .61                  .53
 Year ended 2/29/2004                                12.51               (.11)                       4.59                 4.48
 Year ended 2/28/2003                                15.07               (.07)                      (2.39)               (2.46)
 Period from 3/15/2001 to 2/28/2002                  16.50               (.07)                      (.59)                (.66)
Class F:
 Year ended 2/28/2005                                17.41                .06                        .62                  .68
 Year ended 2/29/2004                                12.73                .01                        4.67                 4.68
 Year ended 2/28/2003                                15.25                .03                       (2.41)               (2.38)
 Period from 3/16/2001 to 2/28/2002                  16.34                .05                       (.33)                (.28)
Class 529-A:
 Year ended 2/28/2005                                17.46                .06                        .62                  .68
 Year ended 2/29/2004                                12.76                .01                        4.70                 4.71
 Year ended 2/28/2003                                15.29                .04                       (2.43)               (2.39)
 Period from 2/15/2002 to 2/28/2002                  15.48                .01                       (.20)                (.19)
Class 529-B:
 Year ended 2/28/2005                                17.20               (.10)                       .61                  .51
 Year ended 2/29/2004                                12.68               (.13)                       4.65                 4.52
 Year ended 2/28/2003                                15.28               (.08)                      (2.42)               (2.50)
 Period from 2/19/2002 to 2/28/2002                  15.21                 - (5)                     .07                  .07
Class 529-C:
 Year ended 2/28/2005                                17.21               (.10)                       .61                  .51
 Year ended 2/29/2004                                12.68               (.13)                       4.66                 4.53
 Year ended 2/28/2003                                15.28               (.08)                      (2.42)               (2.50)
 Period from 2/19/2002 to 2/28/2002                  15.21                 - (5)                     .07                  .07
Class 529-E:
 Year ended 2/28/2005                                17.37               (.01)                       .62                  .61
 Year ended 2/29/2004                                12.73               (.05)                       4.69                 4.64
 Period from 3/7/2002 to 2/28/2003                   16.08               (.01)                      (3.22)               (3.23)
Class 529-F:
 Year ended 2/28/2005                                17.46                .04                        .62                  .66
 Year ended 2/29/2004                                12.78               (.01)                       4.69                 4.68
 Period from 9/17/2002 to 2/28/2003                  12.80                .01                          - (5)              .01
Class R-1:
 Year ended 2/28/2005                                17.28               (.08)                        .62                  .54
 Year ended 2/29/2004                                12.73               (.12)                       4.68                 4.56
 Period from 6/26/2002 to 2/28/2003                  13.96               (.04)                      (1.19)               (1.23)
Class R-2:
 Year ended 2/28/2005                                17.26               (.07)                       .60                  .53
 Year ended 2/29/2004                                12.71               (.11)                       4.66                 4.55
 Period from 5/21/2002 to 2/28/2003                  15.51               (.05)                      (2.63)               (2.68)
Class R-3:
 Year ended 2/28/2005                                17.37                 - (5)                     .62                  .62
 Year ended 2/29/2004                                12.75               (.05)                       4.67                 4.62
 Period from 6/4/2002 to 2/28/2003                   15.06               (.01)                      (2.17)               (2.18)
Class R-4:
 Year ended 2/28/2005                                17.45                .06                        .62                  .68
 Year ended 2/29/2004                                12.76                .01                        4.69                 4.70
 Period from 5/20/2002 to 2/28/2003                  15.67                .02                       (2.78)               (2.76)
Class R-5:
 Year ended 2/28/2005                                17.54                .11                        .63                  .74
 Year ended 2/29/2004                                12.78                .06                        4.71                 4.77
 Period from 5/15/2002 to 2/28/2003                  15.72                .06                       (2.85)               (2.79)







                                                           Dividends and distributions

                                                Dividends
                                                (from net       Distributions            Total            Net asset
                                                investment      (from capital        dividends and        value, end        Total
                                                 income)            gains)           distributions        of period      return (3)
Class A:
 Year ended 2/28/2005                             $(.04)            $(.13)               $(.17)             $18.02            3.94%
 Year ended 2/29/2004                                -(5)               -                    -(5)            17.50           36.96
 Year ended 2/28/2003                             (.02)              (.10)                (.12)              12.78          (15.70)
 Year ended 2/28/2002                             (.09)              (.71)                (.80)              15.29           (7.08)
 Year ended 2/28/2001                             (.10)             (2.26)               (2.36)              17.24            3.03
Class B:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.48            3.13
 Year ended 2/29/2004                                -                  -                    -               17.07           35.91
 Year ended 2/28/2003                                -               (.10)                (.10)              12.56          (16.36)
 Year ended 2/28/2002                             (.04)              (.71)                (.75)              15.12           (7.82)
 Period from 3/15/2000 to 2/28/2001               (.06)             (2.26)               (2.32)              17.14            1.93
Class C:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.39            3.09
 Year ended 2/29/2004                                -                  -                    -               16.99           35.81
 Year ended 2/28/2003                                -               (.10)                (.10)              12.51          (16.42)
 Period from 3/15/2001 to 2/28/2002               (.06)              (.71)                (.77)              15.07           (4.44)
Class F:
 Year ended 2/28/2005                             (.02)              (.13)                (.15)              17.94            3.88
 Year ended 2/29/2004                                -(5)               -                    -(5)            17.41           36.81
 Year ended 2/28/2003                             (.04)              (.10)                (.14)              12.73          (15.74)
 Period from 3/16/2001 to 2/28/2002               (.10)              (.71)                (.81)              15.25           (2.12)
Class 529-A:
 Year ended 2/28/2005                             (.02)              (.13)                (.15)              17.99            3.86
 Year ended 2/29/2004                             (.01)                 -                 (.01)              17.46           36.90
 Year ended 2/28/2003                             (.04)              (.10)                (.14)              12.76          (15.73)
 Period from 2/15/2002 to 2/28/2002                  -                  -                    -               15.29           (1.23)
Class 529-B:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.58           2.94
 Year ended 2/29/2004                                -                  -                    -               17.20           35.65
 Year ended 2/28/2003                                -               (.10)                (.10)              12.68          (16.45)
 Period from 2/19/2002 to 2/28/2002                  -                  -                    -               15.28            .46
Class 529-C:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.59           2.93
 Year ended 2/29/2004                                -                  -                    -               17.21           35.72
 Year ended 2/28/2003                                -               (.10)                (.10)              12.68          (16.45)
 Period from 2/19/2002 to 2/28/2002                  -                  -                    -               15.28            .46
Class 529-E:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.85           3.48
 Year ended 2/29/2004                                -                  -                    -               17.37           36.45
 Period from 3/7/2002 to 2/28/2003                (.02)              (.10)                (.12)              12.73          (20.18)
Class 529-F:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.99            3.75
 Year ended 2/29/2004                                -(5)               -                    -(5)            17.46           36.66
 Period from 9/17/2002 to 2/28/2003               (.03)                 -                 (.03)              12.78             .05
Class R-1:
 Year ended 2/28/2005                               $ -             $(.13)               $(.13)             $17.69            3.09%
 Year ended 2/29/2004                             (.01)                 -                 (.01)              17.28           35.81
 Period from 6/26/2002 to 2/28/2003                  -                  -                    -               12.73           (8.81)
Class R-2:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.66            3.04
 Year ended 2/29/2004                                -5)                -                    -(5)            17.26           35.80
 Period from 5/21/2002 to 2/28/2003               (.02)              (.10)                (.12)              12.71          (17.37)
Class R-3:
 Year ended 2/28/2005                                -               (.13)                (.13)              17.86            3.54
 Year ended 2/29/2004                                -(5)               -                    -(5)            17.37           36.27
 Period from 6/4/2002 to 2/28/2003                (.03)              (.10)                (.13)              12.75          (14.58)
Class R-4:
 Year ended 2/28/2005                             (.01)              (.13)                (.14)              17.99            3.85
 Year ended 2/29/2004                             (.01)                 -                 (.01)              17.45           36.84
 Period from 5/20/2002 to 2/28/2003               (.05)              (.10)                (.15)              12.76          (17.74)
Class R-5:
 Year ended 2/28/2005                             (.08)              (.13)                (.21)              18.07            ,4.20
 Year ended 2/29/2004                             (.01)                 -                 (.01)              17.54           37.32
 Period from 5/15/2002 to 2/28/2003               (.05)              (.10)                (.15)              12.78          (17.83)








                                                                 Ratio of expenses        Ratio of expenses
                                                                   to average net           to average net            Ratio of
                                              Net assets,          assets before             assets after         net income (loss)
                                             end of period        reimbursements/           reimbursements/          to average
                                             (in millions)            waivers                   waivers(4)           net assets
Class A:
 Year ended 2/28/2005                          $13,350                  .69%                      .68%                   .36%
 Year ended 2/29/2004                           11,086                  .73                       .73                    .11
 Year ended 2/28/2003                            6,641                  .77                       .77                    .25
 Year ended 2/28/2002                            7,356                  .71                       .71                    .58
 Year ended 2/28/2001                            7,417                  .67                       .67                   1.18
Class B:
 Year ended 2/28/2005                             984                   1.48                     1.47                   (.41)
 Year ended 2/29/2004                             740                   1.50                     1.50                   (.66)
 Year ended 2/28/2003                             299                   1.55                     1.55                   (.52)
 Year ended 2/28/2002                             174                   1.49                     1.49                   (.27)
 Period from 3/15/2000 to 2/28/2001               41                    1.47(6)                  1.47(6)                 .50(6)
Class C:
 Year ended 2/28/2005                            1,262                  1.54                     1.53                   (.47)
 Year ended 2/29/2004                             849                   1.56                     1.56                   (.73)
 Year ended 2/28/2003                             274                   1.59                     1.59                   (.55)
 Period from 3/15/2001 to 2/28/2002               112                   1.61(6)                  1.61(6)                (.46)(6)
Class F:
 Year ended 2/28/2005                            1,513                  .76                       .75                    .31
 Year ended 2/29/2004                             978                   .78                       .78                    .05
 Year ended 2/28/2003                             289                   .82                       .82                    .22
 Period from 3/16/2001 to 2/28/2002               131                   .84(6)                    .84(6)                 .31(6)
Class 529-A:
 Year ended 2/28/2005                             224                   .77                       .76                    .31
 Year ended 2/29/2004                             128                   .77                       .77                    .06
 Year ended 2/28/2003                             39                    .78                       .78                    .28
 Period from 2/15/2002 to 2/28/2002                1                    .03                       .03                    .03
Class 529-B:
 Year ended 2/28/2005                             56                    1.66                     1.65                   (.59)
 Year ended 2/29/2004                             37                    1.68                     1.68                   (.85)
 Year ended 2/28/2003                             12                    1.71                     1.71                   (.65)
 Period from 2/19/2002 to 2/28/2002                -(7)                  .04                      .04                      -(8)
Class 529-C:
 Year ended 2/28/2005                             76                    1.65                     1.64                   (.58)
 Year ended 2/29/2004                             46                    1.67                     1.67                   (.84)
 Year ended 2/28/2003                             14                    1.69                     1.69                   (.63)
 Period from 2/19/2002 to 2/28/2002                -(7)                  .04                      .04                      -(8)
Class 529-E:
 Year ended 2/28/2005                             14                    1.13                     1.12                   (.05)
 Year ended 2/29/2004                              8                    1.14                     1.14                   (.31)
 Period from 3/7/2002 to 2/28/2003                 3                    1.16(6)                  1.16(6)                (.09)(6)
Class 529-F:
 Year ended 2/28/2005                              6                    .88                       .87                    .20
 Year ended 2/29/2004                              3                    .89                       .89                   (.07)
 Period from 9/17/2002 to 2/28/2003                -(7)                 .40                       .40                    .07
Class R-1:
 Year ended 2/28/2005                             $23                  1.57%                     1.54%                  (.47)%
 Year ended 2/29/2004                             12                    1.60                     1.57                   (.75)
 Period from 6/26/2002 to 2/28/2003                1                    3.01(6)                  1.58(6)                (.49)(6)
Class R-2:
 Year ended 2/28/2005                             245                   1.73                     1.51                   (.43)
 Year ended 2/29/2004                             130                   1.91                     1.53                   (.70)
 Period from 5/21/2002 to 2/28/2003               25                    2.21(6)                  1.54(6)                (.46)(6)
Class R-3:
 Year ended 2/28/2005                             421                   1.08                     1.07                    .01
 Year ended 2/29/2004                             189                   1.16                     1.15                   (.32)
 Period from 6/4/2002 to 2/28/2003                24                    1.29(6)                  1.16(6)                (.09)(6)
Class R-4:
 Year ended 2/28/2005                             168                   .76                       .75                    .35
 Year ended 2/29/2004                             60                    .78                       .78                    .05
 Period from 5/20/2002 to 2/28/2003                3                    .95(6)                    .81(6)                 .24(6)
Class R-5:
 Year ended 2/28/2005                             274                   .45                       .44                    .62
 Year ended 2/29/2004                             127                   .47                       .47                    .37
 Period from 5/15/2002 to 2/28/2003               53                    .48(6)                    .48(6)                 .58(6)






                                                                      Year ended February 28 or 29
                                                           2005        2004       2003       2002        2001

Portfolio turnover rate for all classes of shares          16%         17%        18%        25%         39%




(1)  Based on operations for the period shown (unless otherwise noted) and,
     accordingly, may not be representative of a full year.

(2)  Based on average shares outstanding.

(3)  Total returns exclude all sales charges, including contingent deferred
     sales charges.

(4)  The ratios in this column reflect the impact, if any, of certain
     reimbursements/waivers from CRMC. During the year ended 2/28/2005, CRMC
     reduced fees for investment advisory services for all share classes. In
     addition, during the start-up period for the retirement plan share classes
     (except Class R-5), CRMC agreed to pay a portion of the fees related to
     transfer agent services.

(5)  Amount less than one cent.

(6)  Annualized.

(7)  Amount less than $1 million.

(8)  Amount less than .01 percent.


See Notes to Financial Statements




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of AMCAP Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of AMCAP
Fund, Inc. (the "Fund"), including the investment portfolio, as of February 28,
2005, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2004, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
American Balanced Fund, Inc. as of February 28, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.


DELOITTE & TOUCHE LLP
April 13, 2005
Costa Mesa, CA





TAX INFORMATION (unaudited)

We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of certain distributions received by
shareholders during such fiscal year. The information below is provided for the
fund's fiscal year ending February 28, 2005.

During the fiscal year ended, the fund paid a long-term capital gain
distribution of $123,204,000.

Individual shareholders are eligible for reduced tax rates on qualified dividend
income. The fund designates 100% of the dividends received as qualified dividend
income.

Corporate shareholders may exclude up to 70% of qualifying dividends. The fund
designates 100% of dividends received as qualified dividend income.

For state tax purposes, certain states may exempt from income taxation that
portion of the income dividends paid by the fund that were derived from direct
U.S. government obligations. The fund designates $1,554,000 as interest derived
on direct U.S. government obligations.

INDIVIDUAL SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2006 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2005 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.