The correct option is C after every paragraph
Option B does not make sense as there is no logic in ending a formal letter with a space. It ends with the sender's signature. Formal letters begin with the sender's address, so no space is left before the sender's address. Thus, options B, C and D are incorrect.
However, a space is left between each paragraph. Single-space is left between the paragraphs. A space is left between the final paragraph and the closing.
Thus, option A is correct.