Answer:
The best way to solve this is to look at the last runner first, and
work backwards. The last runner goes 1/4 of the remaining distance
plus 1/4 mile. If you let x stand for the distance the last runner
travels, then
x = (1/4) x + 1/4
(3/4) x = 1/4
x = 1/3 -- the last runner runs 1/3 of a mile.
Now, let's look at the middle runner. He runs 1/3 of the
remaining distance plus 1/3 mile. Let y stand for the distance from
the middle runner's starting point to the end of the race. This
distance is 1/3 of itself plus the extra 1/3 mile the middle runner runs,
plus the 1/3 mile the third runner runs.
y = (1/3) y + 1/3 + 1/3
(2/3) y = 2/3
y = 1 -- the distance run by the last two runners.
Now, let's look at the first runner. He runs 1/2 of the total
distance plus 1/2 mile. Let z stand for the total distance.
This distance is 1/2 of itself plus the extra 1/2 mile run by the first
runner, plus the 1 mile run by the last two runners. So we have
z = (1/2) z + 1/2 + 1
(1/2) z = 3/2
z = 3
The total distance is three miles.
Let's check this answer...
The first runner runs half of 3 miles, or a mile and a half, then he
runs an extra half-mile, for a total of two miles, leaving 1 mile left in
the race.
The second runner runs 1/3 of that remaining mile, plus another 1/3
mile, leaving 1/3 mile for the last runner.
The third runner runs 1/4 of the remaining distance, which is 1/12 of a
mile, leaving 1/4 mile, which is exactly the extra distance run by the
third runner.
So it all checks out.

If you wanted to use "old fashioned algebra" to solve this
problem, you could do it, but it gets very messy. Here's how it
works.
Let "x" be the total distance of the race.
| x = (1/2) x + 1/2 |
the distance run by the first runner |
| + (1/3)(x - ((1/2)x+1/2)) + 1/3 |
the distance run by the second runner |
| + (1/4)(x - ((1/2)x+1/2) - ((1/3)(x - ((1/2)x+1/2)) + 1/3))
+ 1/4 |
the distance run by the third runner |
|
|
| x = (1/2) x + 1/2 |
distributing everything... |
| + (1/3)x - (1/6)x - 1/6 + 1/3 |
|
| + (1/4)x - (1/8)x - 1/8 - (1/12)x + (1/24)x + 1/24 - 1/12 +
1/4 |
|
|
multiplying through by 24... |
| 24x = 12 x + 12 |
|
| + 8x - 4x - 4 + 8 |
|
| + 6x - 3x - 3 - 2x + x + 1 - 2 + 6 |
|
|
gathering like terms... |
| 24x = 12x + 8x - 4x + 6x - 3x - 2x + x |
|
| + 12 - 4 + 8 - 3 + 1 - 2 + 6 |
|
|
|
| 24x = 18x + 18 |
|
|
|
| 6x = 18 |
|
|
|
| x = 3 |
|