First find the rectangle area: 53 × 7 = 371. The cut-out square area is 3 × 3 = 9. Remaining area = 371 − 9 = 362 square mm. For composite figures, split the shape into simple parts or subtract the removed part. Here the square is cut out, so its area must be subtracted from the rectangle area, not added. So the correct choice is 362 mm².