I hold a bond with face value of 1000 units with an annual coupon rate of 12%. The coupon is paid twice yearly. The maturity is in 3 years. What is the present value of the bond given that the interest rate is presently 10% compounded semiannually.
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$\mathrm{with}\left(\mathrm{Finance}\right)\:$

There are 6 periods of half a year until maturity.
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$\mathrm{levelcoupon}\left(1000\,\frac{0.10}{2}\,\frac{0.12}{2}\,6\right)$

If the interest rate is the same as the coupon rate.
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$\mathrm{levelcoupon}\left(1000\,\frac{0.12}{2}\,\frac{0.12}{2}\,6\right)$

In other words, the bond is valued at par when the interest rate is equal to the coupon rate.
Now let the interest rate rise to 14%, compounded semiannually.
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$\mathrm{levelcoupon}\left(1000\,\frac{0.14}{2}\,\frac{0.12}{2}\,6\right)$

This example shows that the value of the bond declines with rising interest rate.