This assumes that you have (or somebody else has) already uploaded the image to the website (see the previous page).
In the editor (called 'Tiny MCE' i.e. where you create the text), place the cursor where you would like to have the image appear.
Click on the camera icon. Within the 'Add Image' utility, find the image and select it.
Choose the alignment of the image. If you select the image to appear as a link, website users have the chance of downloading a higher resolution image from a subsequent page. Amend the 'Title' if you want (that will become the caption in bold text). If you add a 'Description', this will be added to the caption (in normal text). Click insert when finished.
Once you have inserted the picture, you can resize it within the Tiny MCE editor by clicking it and then dragging one of the corners of it either in or out.