McCoy Corporation issued $100,000 of 7.5% 10-year bonds. The bonds are dated and sold on January 1, 2013. Interest payment dates are January 1 and July 1. The bonds are issued for $96,602 to yield the market interest rate of 8%. Using the effective-interest method, what is the total cash payment for interest for each 12-month period? (All amounts rounded to the nearest dollar.)

A. $7,725

B. $4,000

C. $8,000

D. $7,500

Please advise on how answer calculated.