It's based on the number 16. It uses the digits 0 to 9 PLUS the letters A to F.
For example - counting up from 1 to 20...
01 = 01... 11 = 0B... 21 = 15
02 = 02... 12 = 0C... 22 = 16
03 = 03... 13 = 0D... 23 = 17
04 = 04... 14 = 0E... 24 = 18
05 = 05... 15 = 0F... 25 = 19
06 = 06... 16 = 10... 26 = 1A
07 = 07... 17 = 11... 27 = 1B
08 = 08... 18 = 12... 28 = 1C
09 = 09... 19 = 13... 29 = 1D
10 = 0A... 20 = 14... 30 = 1E etc...
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0xFFEF + 1 = 0xFFF0.
That can't be an octal number; it has an 8 in it.
Computers do much of their processing in binary. Hexadecimal is used as a kind of shortcut (easier to read for humans): each hexadecimal digit represents four binary digits.
13541
Hexa-decimal representation is given by, * 24 - 18 * 25 - 19 * 30 - 1E