It fits the description and make scence gramatically.
the first one. i understand that you are completing your homework on time
The sentence that represents a sequence of events where the understanding comes prior to the completion of the homework is the last one: I understand that you are completing your homework on time.
The last sentence is the correct answer because it indicates that the person that is doing the homework has not completed it yet. What indicates that he/she has not finished his/her homework is the Present Progressive Tense ("you are completing"), which is used to refer to something that is going on now. In that way, the other person understands that he/she is doing his/her homework before he/she actually completes it.