There are two ways.
One way is
1. open picture file (.jpg) in MS Paint
2. Select the area to copy.
3. Copy the picture into clipboard by "Copy" or Control C
4. Open MS word and then paste that at the desired location in the document.
5. Save the document with a name. It is saved in .doc format. Or, You can explicity type <your filename>.doc .
6. Close picture file and MS paint.
Another way is
1. Open MS word and place the cursor where you want to have the picture.
2. Select the option on the menu bar : Insert , Insert picture , Insert picture from a file. Then select the file.
3. The picture object is pasted in the document. Resize it make alterations as you want.
4. Save document as your file name and extension .doc
you do not need to open picture file in ms paint, in this way.