Inside the lens, which is the large and moveable piece at the top of the overhead projector, you'll find two mirrors. The mirrors work together to reflect light and project an image onto a white screen. The first mirror in the series works to capture the light from the base of the projector, where you have a flat surface for transparencies. The first mirror reflects that light to the second mirror, which then reflects it through a magnifying lens for large projection onto the screen.
You'll notice that your projector has one light and it is not part of the lens construction. Still, the light is an integral part of the lens function. The light on an overhead projector is found in the flat, glass surface where you place your transparencies. The light is necessary for the lens to detect the difference between the clear transparency and the darker printed or written lines, which results in the projected image.
Once the two mirrors have first picked up the transparency reflection and reflected it toward the screen, the reflection would still be impossibly small without the use of the magnifying lens in the overhead projector lens construction. The magnifying lens captures the image reflected by the mirror and displays it on the screen so that it's much larger and more legible. The size and clarity of the actual projection relies on how close the lens is to the transparency and how close the entire projector is to the screen.
The entire lens construction on the overhead projector features a knob at the side. That plastic knob allows you to adjust the lens up and down the projector arm to change the focus of the lens. The closer the lens is to the transparency, the sharper the image, but only when combined with the distance from the projector to the screen. You'll likely need to adjust the lens up and down each time you use the projector to get the best combination of distance, size and clarity.