(A) Initial angular velocity,$\omega_{1} = 40\; rev/min$.
Final angular velocity $= \omega_{2}$.
The moment of inertia of the boy with stretched hands $= I_{1}$.
The moment of inertia of the boy with folded hands $= I_{2}$.
The two moments of inertia are related as: $I_{2} = \frac{2}{5} I_{1}$.
Since no external torque acts on the system,the angular momentum $L$ is conserved.
Hence,$I_{2} \omega_{2} = I_{1} \omega_{1}$.
$\omega_{2} = \frac{I_{1}}{I_{2}} \omega_{1} = \frac{I_{1}}{\frac{2}{5} I_{1}} \times 40 = \frac{5}{2} \times 40 = 100\; rev/min$.
$(b)$ Final kinetic energy $E_{F} = \frac{1}{2} I_{2} \omega_{2}^{2}$.
Initial kinetic energy $E_{I} = \frac{1}{2} I_{1} \omega_{1}^{2}$.
$\frac{E_{F}}{E_{I}} = \frac{\frac{1}{2} I_{2} \omega_{2}^{2}}{\frac{1}{2} I_{1} \omega_{1}^{2}} = \frac{2}{5} \times \left(\frac{100}{40}\right)^{2} = \frac{2}{5} \times \left(\frac{5}{2}\right)^{2} = \frac{2}{5} \times \frac{25}{4} = 2.5$.
Therefore,$E_{F} = 2.5 E_{I}$.
The increase in rotational kinetic energy is due to the work done by the child in folding his arms,which is provided by his internal muscular energy.