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To add an image to a webpage, start by downloading or locating the desired image, such as "shrek.png". Place this image in the same folder as your "index.html" file. Within the body element of the HTML, create an image element using the self-closing tag `<img>`. Set the source attribute (src) equal to the image name in double quotes. If working with multiple images, consider creating a separate folder named "images" for organization. If the image is in a different folder, ensure to specify the correct file path relative to your "index.html".