Briefly describe what occurs when a red blood cell is placed in water (a hypotonic solution).

When a red blood cell is placed in water, the water molecules will enter the cell rapidly as a result of osmosis. Osmosis is the process by which molecules moves through a cell permeable membrane from the region of lower concentration to that of higher concentration.
The inside of the red blood cell is more concentrated than the water in which it is placed, so water will move into the cell via osmosis. 
This will make the cell to swell up and to burst open.