Error "ImageMagick Not Configured Properly"

[namangoya]

I am getting problem while uploading files in "Item". When I upload word file or *.ico file it gets uploaded and appears as link on both Admin and Public site.

But when I try uploading *.jpg file it gives me error "Imagemagick not properly configured.invalid directory given for the ImageMagick command!"

Also when I test, Imagemagick Path in settings, it fails. I checked path with my webhost it says /usr/local/bin/. But it still fails.

When I looked on server under archive folder, In files folder, uploaded file *.jpg was present but none of the other subdirectories (like thumbnails)had that image.

It means it is not converting the images.
Please tell me the solution.