[texworks] Problem with .eps files

[Mark Saul]

I hope someone here can help me.

I am a relatively naive end user of TexWorks, which has been wonderful 
for me.

I'm now working on a book, and the publisher requires that diagrams 
(it's mathematics) be in .eps format.  It says in my Latex manual 
(Gratzer, More Math in Latex) that Latex assumes .eps files, so I should 
just use the command \usepackage{graphicx} in the preamble, then code like:

\begin{figure}[ht]

\includegraphics{fig1}

\ncaption{1}

\end{figure}


This works fine if the file fig1 is a .png file.  But if I try it with 
an .eps file, I get an error message:

LaTex Error: 'fig1' not found.

The only thing I changed was the format: .png to .eps.  Both these 
graphics files were created with GeoGebra, a dynamic geometry package.   
I tried saving the Tex source code as foo.tex and also as foo.ltx.  It 
didn't seem to help.  I am using Windows (but as a bona fide naive user, 
I don't know the version--it's later than Windows 7).

Can anyone advise me on how to use .eps files?