How does the relationship between bond price and interest rate impact the overall performance of a bond investment?

The relationship between bond price and interest rate is inverse - when interest rates rise, bond prices fall, and vice versa. This impacts the overall performance of a bond investment because if you sell a bond before it matures, you may receive less than what you paid for it if interest rates have increased. Conversely, if interest rates have decreased, you may be able to sell the bond for more than what you paid.