To make the cinnamon sugar topping: in a small bowl, mix together the 1/2 cup sugar and 1 teaspoon cinnamon; set aside.
To make the cake: In a small mixing bowl, sift together the flour, baking powder, and salt; set aside.
In a larger mixing bowl, beat together the oil, sugar, and eggs, using an electric mixer on medium speed; beat for about 3 minutes or until light and thick.
Add the dry ingredients to the egg/sugar/oil mixture in three parts, alternating with the milk and vanilla, beating after each addition until smooth.
In another bowl, toss the apples with half the cinnamon-sugar topping; then stir half the apples into the batter.
Pour the batter into a greased and lightly floured 10-inch tube pan.
Drop the remaining apples on top of the batter and sprinkle with the remaining cinnamon sugar.
Bake in a 325 degree oven for 60-70 minutes or until a pick comes out clean.
Let the cake cool in the pan for 1 hour.
Remove cake from pan and cool completely on a wire rack.