Yes, the PRS500 will definitely read rtf files. It will also read MS Word files, though it translates them into rtf automatically.
Perhaps the file is not showing up because the metadata isn't accurate. Find the rtf file. Right-click on it. Choose 'properties.' Then make sure that the author and title are correct. Amend if necessary.
Then go to the sony software (Connect or ebook library), click on 'file' and select 'import files.' Follow the instructions to import your rtf file.
This has always worked for me.
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