There are two parts to this problem.
In the first part, the stone is rising with the balloon. It has a certain acceleration for a certain time. At the end of that it will have reached a certain height and velocity. Calculate it.
Then the stone is released. With the initial velocity and height calculated above, it now starts dropping. It is now subject to the acceleration of gravity.
With the above guidance you should be able to solve the problem. You just need to realize that there isn't a "single" acceleration throughout. So leave the math behind for a minute, and draw yourself a picture of what is going on...
I drew the picture above but deliberately didn't annotate it. This is the height of the stone with time - note it starts by accelerating up (1.25 m/s^2), then falls at t=8 (with a = -9.891 m/s^2). See how the curvature changes?