The statement of your question is quite confused. Clearly $1 + \frac{1}{4} + \ldots + \frac{1}{4^n}$ is a quantity that gets larger with $n$ -- you're adding on more positive numbers -- so it cannot be equal to any fixed number.
I think what you want to show by induction is:
For every real number $a \neq 1$ and every positive integer $n$, $1 + a + \ldots + a^n =
\frac{1-a^{n+1}}{1-a}$.
The setup here is the usual one for the easiest inductions: you check the base case ($n=1$), then for an arbitrary positive integer $n$ you assume that $1 + a + \ldots + a^n =
\frac{1-a^{n+1}}{1-a}$. Then you add the next term -- here $a^{n+1}$ -- to both sides and do at little algebra to show that you get what you're supposed to: here, $\frac{1-a^{n+2}}{1-a}$. If you can do any induction proofs you can probably do this without much trouble; please try it.
Now:
1) If $|a| < 1$, then $\lim_{n \rightarrow \infty} a^{n+1} = 0$, so
$\lim_{n \rightarrow \infty} (1+a + \ldots + a^n) = \sum_{n=0}^{\infty} a^n = \frac{1}{1-a}$.
If you plug in $a = \frac{1}{4}$ you'll get the single identity that I think you're asking for. This is one of the very first and most important instances of finding the sum of an infinite series. One often spends much of an entire course studying such things, e.g. towards the end of second semester calculus.
2) Most people would prefer not to establish the boxed identity by induction. This is because of the "kryptonite" inherent in the otherwise superstrong method of proof by induction: you must know in advance what you are trying to prove. Another standard method will allow you to find the answer without knowing it in advance:
Put $S = 1 + a + \ldots + a^n$.
Multiply by $a$:
$aS = a + \ldots + a^n + a^{n+1}$.
Now subtract the second equation from the first and note that most of the terms on the right hand side cancel:
$S(1-a) = S-aS = 1 - a^{n+1}$.
Since $a \neq 1$, $1-a \neq 0$ so we can divide both sides by it. Behold, we have gotten the answer
$S = \frac{1-a^{n+1}}{1-a}$
that we previously had to know in order to do a proof by induction.