This may seem like a no brainier to everyone who has been working with wordpress for a while but when you first get started this is one of the first road blocks you will hit. Each theme has a set of images that are a part of the framework. This code makes a call to that image.
The Code below shows how I am making a call to the template folder. This is where you need to put the image so that the code will be able to find it. The key part of the code is this is a dynamic call to the template directory. You can use this in any path to also make calls for other stuff you may need.