Alice Swanson got a 3% raise in her salary this year compared to her salary last year. This year she is earning $22,660. Let her salary last year be X. As $22660 is 3% greater than X, X*(1 + 0.03) = 22660
=> X = 22660/1.03 = $22000
Her salary last year was $22000.
The first sentence is intended to throw you off. The cost of living has nothing to do with calculating Alice's past salary.
To solve word problems it often helps to turn them into an algbric fromula and then solve the fromula.
Let x be Alice's salery last year and raise can be her raise.
x * (raise) + x = 22660
x * (raise+1) = 22660
The plus one is needed because her raise is 3% more. So we want to use 103% or 1.03.
x*1.03 = 22660
Solve for x
x = 22660/1.03
x = 22000 :)