Media in Templates

I’m a brand new user of WordPress, managing a site that was set-up by professionals using (in part) custom templates. In one of those templates (news.php), the following code references a picture (mike.png) that needs to be updated:

<td width="110"><a>/index.php/politics/"><img src="<?php bloginfo('url') ?>/images/mike.png" alt="US </a>

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The image does not show up in the media library. Where does this image reside and how do I replace it with a new image?

Thanks