Answer: 1
If the 3178 block repeats forever, then we need to divide by 4 to look at the remainder. This is simply because the block is 4 values wide.
358/4 = 89 remainder 2
The remainder 2 means we're on the 2nd slot of "3178", so we circle the "1" as the final answer.
The 358th digit after the decimal point in 0.31783178... is 1.
If you aren't convinced, then try a smaller value instead of 358. Let's say we picked the 7th digit
7/4 = 1 remainder 3
The remainder 3 means we look at the 3rd slot of 3178. The 7th digit is 7.
Another example: The 10th digit is 1 because 10/4 = 2 remainder 2. The 1 is in the 2nd slot of 3178, so it's also in the 10th slot.
Side note: If you get remainder 0, then treat it as remainder 4. Both mean the same thing when dividing by 4.