Mi abuela vive en México y es simpática y también tiene el pelo largo. Ella tiene una pequeña tienda donde vende tamales para ganar dinero. A veces ayuda a mi tía a vender la ropa que hace mi tía. No es muy rica, pero todavía está feliz de tener a su familia con ella. Ella no sabe cómo hablar inglés, pero solo sabe unas pocas palabras.
Translation: My grandma lives in Mexico and she is nice and also has long hair. She has a little shop where she sells tamales to make money. She sometimes helps my aunt to sell the clothes my aunt makes. She is not very rich but she is still happy that she has her family with her. She doesn't know how to speak English but only knows a few words.
It's the third option because you are talking about a singular person in the third point of view, so you must use the he/she/it conjugation which is -e
