To upload an image to your assignment, click on 'Insert' on your toolbar. You can also click down on your activity, or click and drag a rectangle on your activity.  Click, or Click and Drag The Tools menu will pop up. Select 'Image' from the right column.

Draw a box on the worksheet where you want the image placed. The Upload an Image box will appear: 

You can either choose an image from your computer that you would like to add to your Gallery, drag an image into the gray box, or use a preexisting one in the gallery. Once you click on that image, it will automatically paste into the box you drew on your assignment. You have the option to resize the box, color the border around the image, lock the aspect ratio, and make the background transparent. Your students will not be able to edit the image when they open the assignment.

Images Tool Explainer Video

Here is a short video showing how to use this feature: