If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.

The amount of the purchases discount is calculated as 2% of the merchandise cost, which is $3,500 x 0.02 = $70. Since the terms are FOB destination, the buyer is responsible for paying for the prepaid freight costs of $125. Therefore, the total amount due is $3,500 + $125 = $3,625. If the buyer pays within 10 days, they can deduct the purchases discount of $70, which means they only need to pay $3,555. So, the statement is true.