How do I add an image to the paragraph block in WordPress?

When your paragraph has been created, add an image block on top of the paragraph block:

Choose an alignment (right or left) for the image by selecting the Change Alignment icon in the block editor toolbar:

The image below has the alignment to the left:

Next, select the desired image, using one of the options given (as shown above):

You can find more information regarding adding an image to text at: 3 Easy Ways to Place Images Next to Text in the Block Editor