Preheat the oven to 350°F (175°C). Grease and flour two 9-inch round cake pans, then line the bottoms with parchment paper.

In a medium bowl, whisk together the flour, baking powder, and salt.

In a large bowl, beat the butter and granulated sugar together until light and fluffy, about 3 to 4 minutes.

Add the eggs one at a time, beating well after each addition, then mix in the vanilla extract.

Add the dry ingredients in three additions, alternating with the milk, beginning and ending with the dry ingredients. Mix just until combined.

Gently fold in the rainbow sprinkles.

Divide the batter evenly between the prepared pans and smooth the tops.

Bake for 25 to 30 minutes, or until a toothpick inserted in the center comes out clean.

Let the cakes cool in the pans for 10 minutes, then turn them out onto wire racks to cool completely.

To make the frosting, beat the butter until creamy. Gradually add the powdered sugar, then mix in the vanilla, salt, and enough cream or milk to reach a smooth, spreadable consistency.

Place one cooled cake layer on a serving plate and spread with frosting. Top with the second layer and frost the top and sides of the cake.

Decorate with additional sprinkles before serving.