Still beating, add eggs one at a time. Stir in vanilla. Add flour mixture in three additions alternating with two additions of milk. Mix well between additions and scrape down sides of the bowl as necessary. Gently stir in apple pieces.
Scrape batter into prepared pan and place on centre rack in preheated oven.
Bake for 50 to 55 minutes or until tester inserted into centre of cake comes out clean. Cool on a rack. Pour boiling water over bags. Stir, cover and steep for 5 minutes. Place sugar and butter in a heavy saucepan set over medium-high heat.