Why does higher interest rates in a country attract foreign investment...pls explain in simple terms..?

In theory its because the interest rate is higher in one counrty compared to the other...

In reality this is the most simple explanation....but...the other factor than will impact the outcome is the exchange rates between the two contries as this will change from the day they make the deposit into the higher interest rate acccount and the day they take their funds out.
Usually the exchange rate goes up as investors move their funds into the country with the higher interest rate but go down when they move the money out.... so it can be a gamble in the long run.

Simply, investors are looking to get the best return they can, if somebody offers them a higher interest rate they will invest.

I need to borrow $100.00 USD from you and I can pay you 10% after a year or $110.00 USD.

Another friend of yours also need to borrow $100.00 USD from you and she can pay you 20% after a year or $120.00 USD.

Who would you choose?

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