My grandmother died _____ 7 PM _____ 12 August 1989.
Answer: At; on
Explanation
She died at 7 PM on 12th August.
We use preposition at before time. Like at 12 AM, at 7 PM, at 11 AM etc.
We use preposition on before a date. Like on 12th August, On 5th June, On 8th December etc.