Here's why:

* Endothermic reactions absorb heat from their surroundings. This causes the temperature of the surroundings (in this case, the water) to decrease.

* Exothermic reactions release heat into their surroundings, causing the temperature to increase.

When ammonium nitrate (NH₄NO₃) dissolves in water, the process requires energy to break the bonds between the ammonium and nitrate ions. This energy is absorbed from the surrounding water, causing the temperature to drop.