Solid polymer electrolytes (SPEs), especially the ones dissolving lithium ions in poly ethylene oxide (PEO) polymer by the bonds between ether oxygen and cations, have long been investigated with the goals of developing batteries with high energy density. It has been accepted that most ions move through the amorphous polymer phase and their mobility depends crucially on the solution environment, though the detailed transport mechanism is not fully developed. Recently, ternary mixtures composed of PEO/salts in aqueous solution have been shown to display more attractive properties than binary SPE mixtures. Numerous experiments have found a dramatically changed environment for the cations and increased ionic conductivity of polymer/salts electrolytes for increased relative humidity, suggesting that the coupling between polymer chains and cations may be weakened due to the existence of water molecules. In this paper we report molecular dynamics ( MD) simulation, using an optimized force field that includes polarizabilities via the dynamic shell model, to study the structural properties of inorganic ions in PEO aqueous solution and the competitive solvation of ions between water and polymer oxygen. Our simulation results show that ions are solvated more favorably by water than by polymer. This conclusion is in a good agreement with neutron diffraction by isotropic substitution (NDIS) experiments.