Just with the installation of ckeditor the image upload option is not available, install IMCE and then edit the ckeditor.config.js in which uncomment the following lines

//config.extraPlugins += (config.extraPlugins ? ',imce' : 'imce' );
//CKEDITOR.plugins.addExternal('imce', Drupal.settings.ckeditor.module_path + '/plugins/imce/');

In order to add the toolbar button, simply add

['Link','Image','IMCE']

in