Final answer:
When sunlight passes through a raindrop and bends, this is known as refraction. Refraction, along with reflection inside the raindrop, leads to the dispersion of light into a rainbow of colors.
Step-by-step explanation:
The phenomenon that occurs when sunlight passes into and out of a raindrop and the light rays bend is known as refraction. Refraction is the change in direction of a light ray as it passes through variations in matter, such as from air to water.
Raindrops cause dispersion of the refracted light, splitting it into its component colors, creating a rainbow. This process is not just simple refraction but also involves the light being reflected inside the raindrop before it exits and is refracted again into the observer's eye.