Summary:

• Select the rectangle tool and draw a new rectangle
• The rectangle should be filled with a solid color and have a transparent stroke.
• Drag the small circle in the corner of the rectangle to adjust the radius of the rounded edge.
• Drag your layer with the image you want to round above your rectangle layer
• Right click your image layer and choose Create Clipping Mask. Your image should now take on the shape of the rounded rectangle you created.