I think inverse variation problems are easier to solve informally by thinking of the second of these forms as saying that the product of x^2 and y is a constant. If the product of two numbers is a constant, then if one goes up by a factor of x, the other has to go down by a factor of x.
In your example, the value of x went up by a factor of 8 (4/0.5 = 8); so the value of x^2 went up by a factor of 8^2=64. That means y has to go down by a factor of 64. So the new value of y is