The number of Prince George's County seventh, ninth and tenth graders passing the Maryland Functional Reading Test, which examines a students' ability to read and understand written material such as road signs and application forms, increased for the fifth year in a row, school officials announced last week.

A passing grade of 80 percent on the 128-question test will be required for graduation from all Maryland public high schools beginning with the 1982 graduating class.

Of the seventh graders taking the test last October, 73 percent passed, compared with only 62 percent when the test was first given in 1973. Seventh graders are tested only to help them become familiar with the exams.

Ninth graders, who take the test to meet state requirements, take a different version. When ninth graders first took the test in 1977 only 71 percent passed, and in 1980, 75 percent passed.

Under state law, students who do not pass the test in the ninth grade must be given remedial help and at least three more chances to pass it before graduation. Eighty-three percent of current 10th graders have already passed the test as have 94 percent of 11th graders, who will be the first class who must pass the test to graduate.

The test questions are drawn from written materials that the average adult must be able to read and understand in order to function in modern society. These materials include telephone directories, mail order forms, road signs and work applications. The test was developed by the state Department of Education in the early 1970s using the responses of some 10,000 adults, "everybody from ditchdigger to doctor," according to Elwood Loh, who is in charge of testing for Prince George's county schools.

"It's the kind of test that the first time I looked at it I said, 'Anyone can do this,' but it's not true," said Loh.

Since 1975 the county school system has scrambled to build instructional material into the curriculum at every grade level to prepare students for the test, and to improve the material as test results came in. School officials credit these instructional programs for the steady improvement in test scores.