Add the decimals: align the decimal points.

• 8.54 + 7.89
• 4 + 9 = 13 hundredths: write 3, carry 1 to tenths
• 5 + 8 + 1(carry) = 14 tenths: write 4, carry 1 to ones
• 8 + 7 + 1(carry) = 16 ones
• 8.54 + 7.89 = 16.43

Final Answer: 16.43