T. Rowe Price Association's Growth Stock Fund, the largest of the nation's mutual funds solds without commission rates (no-load), experienced a 9 percent decline in net asset value per share in 1977 compared with a 17.3 percent decline for the Dow Jones industrial average and a loss of 11.5 percent for the Standard & Poor's 500-stock index.

Two other stock mutual funds sponsored by the Baltimore-based investment counseling company also outperformed general market measurements, and all three paid record annual dividends, according to the funds' annual reports.

Three separate Rowe Price bond funds, meanwhile, have increased their holdings of short-term issues (maturing within two years) and reduced investments in long-term securities (10 years or more), in anticipation of higher interest rates.

Rowe Price's Prime Reserve Fund, a money-market fund that invests in short-term debt securities, boosted its yield by almost a full percentage point in the final quarter last year as interest rates rose. The Tax-Free Income and New Income funds reached record levels of assets and shareholders during the past year.

Rowe Price mutual funds are among the most widely held in the Washington area, with about 40,000 shareholders in the District, Maryland and Virginia.

Nearly half of those individuals own shares of Growth Stock Fund, which had total assets on Dec. 31 of 986 million ($10.25 a share) compared with $1.17 billion ($11.26) a year earlier. Earnings of firms in the Growth Stock portfolio rose 21 percent compared with 11 percent fr the S&P 500.

Chairman E. Kirkbride Miller and President Cornelius C. Bond Jr. told stockholders in their annual report that although the outlook for the nation's economy is generally favorable, "investors remain concerned about structural problems and the ability of the administration to deal with them."

They said they "remain enthusiastic" about earnings and dividend growth prospects for companies in the fund's portfolio. They announced a 22.6 percent increase in the annual dividend rate to $0.2766 a share.

The fund's largest holding at the end of 1977 was International Business Macines Corp., with 240,000 shares and a market value of $65.5 million (6.6 percent of the fund).

In the final quarter, the largest purchase was Continental Oil Co. shares; the best performer in 1977 was Rank Organisation, a diversified British concern engaged in leisure, development and copying equipment, which gained 115 percent in market value.

Growth Stock Fund also owns more than 1 million shares of Marriott Corp., and 528,000 shares of Black & Decker, a Maryland tool manufacturer.

The Rowe Price New Horizons Fund, which owns shares of emerging growth firms, reported an increase of 11.6 percent in net asset value per share to $8.17 in 1977 and total assets of $393 million.

President Curran W. Harvey said a factor in the growth was the record rate at which large companies tried to buy small ones at substantial market premiums - a trend he forecast would continue in 1978, generally boosting market values of emerging companies.

At the end Era Fund, the third stock fund, total assets were $198 million and per-share value decline 6.1 percent to $11. The fund invests in natural resource companies. Precious metals and stones were the best performers during 1977.

For the three bond funds, recent income yield, total assets and value per share on Dec. 31 were as follows: New Income, 7.8 percent, $284 million ($10.01 a share, down from $10.23 a year earlier); Tax-Free Income, 5.2 percent, $183 million ($10.28 vs. $10.20); and Prime Reserve, 6.03 percent, $34 million ($10.00).

Rowe Furniture Corp. and American Furniture Co., two Virginia furniture manufacturers, have reported improved sales and profitability for fiscal year 1977.

Rowe, based in Salem, reported yesterday that earnings rose 9 percent to $572.000 (24 cents a share) in the year ended Nov. 30, compared with $524,000 (22 cents) in the previous 12 months. Revenues from shipments rose 1 percent to a record $47.5 million.

American, of Martinsville, reported a sharp rebound in profits during the year ended Dec. 3 to $666,401 (24 cents a share) compared with $52,612 (2 cents) the previous year. Sales were up 12 percent to $56 million.

Fair Lanes Inc. and Bowl America, two bowling center companies, reported increased second-quarter and six-month profits.

In the three months ended Dec. 31, Baltimore-based Fair Lanes reported earning of $1.5 million (36 cents a share) compared with $1.2 million (30 cents) as sales rose to $12.4 million from $11 million. Six-month profits rose 24 percent to $1.7 million (41 cents) compared with $1.3 million (33 cents) as sales increased 13 percent to $22 million.

Springfield-based Bowl America reported record second-quarter profits of $413,255 (44 cents) in the period ended Jan 1, up 10 percent from $373,499 (40 cents) a year earlier. Sales rose to $3.7 million for $3.2 million.

For the six months, Bowl America profits were a record $415,660 (44 cents) on sales of $6.3 million compared with earnings of $350,000 (37 cents) and sales of $5.3 million. Fair Lanes will open its 68th bowling center in Phoenix this week; Bowl America operates $25 centers.