user story #4 is telling you to nest an img element that has id="image"
in the div element you just created
Edit: here’s a terminology review
HTML tags vs elements vs attributes
Tags are used to mark up the start and end of an HTML element. The following are paragraph tags. <p></p>
An element in HTML represents some kind of structure or semantics and generally consists of a start tag, content, and an end tag. The following is a paragraph element: <p>This is the content of the paragraph element.</p>
An attribute defines a property for an element, consists of an attribute/value pair, and appears within the element’s start tag. An element’s start tag may contain any number of space separated attribute/value pairs.
The most popular misuse of the term “tag” is referring to alt attributes as “alt tags”. There is no such thing in HTML. Alt is an attribute, not a tag. <img src="foobar.gif" alt="A foo can be balanced on a bar by placing its fubar on the bar's foobar.">