Assumption: Each element of a set C of all real numbers with x # of digits can be expressed as a fraction, if we use the method from the OP to obtain set C.
Base case 1: x=0
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0 = 0/1
1 = 1/1
Base case 2: x=1
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0.0 = 0/10
0.1 = 1/10
0.2 = 2/10
...
0.9 = 9/10
Theorem holds for both base cases.
Inductive hypothesis: If each element in the set A(n) of all real numbers with n # of digits can be expressed as a fraction, then each element in the set B(n+1) of all real numbers with n+1 # of digits can be expressed as a fraction.
Inductive step:
We know that we can express any element from A(n) as a fraction (this was assumed). We denote an element from A(n) as:
e(i) = i / [ 10^(n-1) ]
where i goes from 1 to 10^(n-1). So, for example, for n=2, we have elements e(1) = 1/ 10^1, e(2) = 2/10^2, e(3) = 3/10^3 ... e(9) = 9/9^3 which is another way of writing out the set 0.1, 0.2, 0.3, ... 0.9
Now, note that any element in B(n+1) can be written as:
e(i) = i / [10^(x-1)], where i goes from 1 to 10^(x-1).
or as e(i) = i / [10^n], where i goes from 1 to 10^n, and where x=(n+1)
Now, we know that i / [10^(n-1)] is a fraction and we have to show that i / [10^n] is a fraction too. If we can do that, the proof is done.
If i / [10^(n-1)] is a fraction, then i has to be a rational number. Therefore i is a rational number.
If i is a rational number, then i / [10^n] is a rational number as well.
Therefore our initial assumption must be correct.
Therefore each element of a set C of all real numbers with x # of digits can be expressed as a fraction, if we use the method from the OP to obtain set C.
Therefore the method used to count real numbers in the OP is ONLY including fractions; it's excluding all rational numbers.
Therefore it is not a correct method that can be used to list all real numbers, since there exist irrational real numbers.
By assuming that the method is correct we arrive at an incorrect conclusion - namely that the set of real numbers is countable. Therein lies the paradox.
QED