Sentence Correction

1. A "calendar stick" carved centuries ago by the Winneba tribe may provide the first evidence that the North American Indians have developed advanced full-year calendars basing them on systematic astronomical observation.
[A] that the North American Indians have developed advanced full-year calendars basing them
of the North American Indians who have developed advanced full-year calendars and based them
[C] of the development of advanced full-year calendars by North American Indians, basing them
[D] of the North American Indians and their development of advanced full-year calendars based
[E] that the North American Indians developed advanced full-year calendars based

Can any one please tell me the answer of the above question? And explain me the exact usage when to use what "of" versus "that"...And also about when to use "that"

My answer is E. I'll try to explain this with my limited knowledge of grammar.

First let's talk about "that" versus "of". "That" is used to connect two sentences. "of" is a preposition which is used to connect two nouns, pronouns or phrases. In this question we have two sentences:

A "calendar stick" carved centuries ago by the Winneba tribe may provide the first evidence

and

the North American Indians have developed advanced full-year calendars basing them on systematic astronomical observation.

Using "of" in place of that, Option B and D are ruled out (coz. they refer to "evidence not of development but of North American Indians". That's weird.)

Option C would have been correct had the author not used "basing them". Please note that the use of "of" is not wrong. In all the options (B, C and D), "of" is used to compare two phrases - 'the first evidence' with 'the North Americans' or 'the development'.

Hope this helps.

- 1st 2-3 split: 'basing them on' vs 'based on' . 'based on' is correct idiom -> A,B, C are out.
- 'evidence of' vs 'evidence that' . Both terms are correct. And D and E expresses the same meaning but E is clearly concise.
Therefore E is answer