A mark-up would case for the price to increase.
If the store pays $32 and they mark it up by 16%, it is basically saying that they took the original price and increased it by 16% of $32.
There are two ways to do this--one of them is simpler (in my opinion) than the other. I will show you the simpler way...
Normally in the longer way we would take 16% of $32 and then take that product and add it to $32. But since we know that it is a mark-up (the price will increase) we can just multiply $32 by 1.16 (notice I added one whole value to this).
$32 x 1.16 = $37.12
(Also, if you want to check, then you can take the longer method and see if that answer matches up to $37.12.)