Using a handheld mixer or a stand mixer with the paddle attachment, mix the butter and sugar until light and fluffy (a few minutes on medium speed). Add the eggs, one at a time, beating well and scraping down the sides of the bowl after each egg. Add the vanilla and water (you can also use dark rum for a richer flavor, or milk). Next, add the flour mixture and mix on low speed until combined. Using a rubber spatula, fold in the chopped apples.