Given a segment $AB$ of length $1$, define the set $M$ of points in the following way: it contains the two points $A,B$ and also all points obtained from $A,B$ iterating the following rule: for every pair of points $X,Y$ in $M$, the set $M$ also contains the point $Z$ of the segment $XY$ for which $YZ = 3XZ$. Prove by induction that the set $M$ consists of points $X$ from the segment $AB$ for which the distance from the point $A$ is either $$AX = \dfrac{3k}{4^n} \hspace{3 mm} \text{or} \hspace{3 mm}AX = \dfrac{3k-2}{4^n}$$ where $n,k$ are nonnegative integers.
I am confused by this question since I am not used to doing induction geometrically. Seeing as how we have to iterate each time a new point, I find it hard to formalize an inductive argument to prove this.
Every point on the segment $AB$ has some distance from $A$. So let's say you have two such points, $X$ and $Y$. Let $x$ denote the distance of $X$ from $A$, $y$ the distance of $Y$ from $A$.
Let $D$ be the set of distances from $A$ to each point in the set $M$ that is constructed in the problem. Recall the rule in the problem that says that if $X$ and $Y$ are members of the set $M$, the point $Z$ of the segment $XY$ for which $YZ = 3XZ$ is too. An equivalent rule is, if $x$ and $y$ are numbers in the set $D$, then the number $z$ between $x$ and $y$ such that $|z - y| = 3|z - x|$ also is in the set $D$.
The theorem you are to prove is that $D$ consists entirely of numbers of the form $\dfrac{3k}{4^n}$ or of the form $\dfrac{3k-2}{4^n}$.
There, now it's not a geometric induction any more. Just arithmetic.
There are still some complications, for example you can't just assume $x < y$, you can't just assume that one of $x$ and $y$ has the form $\dfrac{3k}{4^n}$ and the other has the form $\dfrac{3k-2}{4^n}$ (they might both have the same form), and you can't just use one value of $k$ to write both $x$ and $y$. You might have to consider several possible cases separately for the induction step.