The raindrops act like a prism, so when the light from teh sun shines through them, the raindrops break the light up into its colours, Basically the raindrop bends each colour (or wavelength of light) to a different amount, so you can see the colours.
I’m with Ned on this one. The best view of a rainbow is when you have the sun behind you, a dark cloud in front of you in the distance which is raining. It’s the best view because the colours are more visible against the dark cloud background.
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