python - Inserting image into IPython notebook markdown

Question

I am starting to depend heavily on the IPython notebook app to develop and document algorithms. It is awesome; but there is something that seems like it should be possible, but I can't figure out how to do it:

I would like to insert a local image into my (local) IPython notebook markdown to aid in documenting an algorithm. I know enough to add something like <img src="image.png"> to the markdown, but that is about as far as my knowledge goes. I assume I could put the image in the directory represented by 127.0.0.1:8888 (or some subdirectory) to be able to access it, but I can't figure out where that directory is. (I'm working on a mac.) So, is it possible to do what I'm trying to do without too much trouble?

Answer 1

Most of the answers given so far go in the wrong direction, suggesting to load additional libraries and use the code instead of markup. In Ipython/Jupyter Notebooks it is very simple. Make sure the cell is indeed in markup and to display a image use:

![alt text](imagename.png "Title")

Further advantage compared to the other methods proposed is that you can display all common file formats including jpg, png, and gif (animations).