Use the formula for the angle between hour and minute hands at time $H:M$:
\[
\theta = \left|30H - \frac{11}{2} M\right|.
\]
At quarter past 3, $H=3$ and $M=15$ minutes.
Calculate:
\[
\theta = |30 \times 3 - \frac{11}{2} \times 15| = |90 - 82.5| = 7.5^\circ.
\]
Therefore, the angle between the hands is $7\frac{1}{2}^\circ$ (7.5 degrees).
*Note:* The option (c) 7$\frac{3}{4}^\circ$ (7.75°) is incorrect.