Solution: For a simple interest loan with an annual interest rate of 6%, the total interest rate for three years is 6%x3= 18%.

For a three-year compound interest loan with an annual interest rate of 5.8%, the total interest rate at maturity is: 5.8%+5.8 %× (1+5.8%)+5.8 %× (1+5.8%)? =5.8%+6. 1364%+6.4923 1 12%= 18.4287 1 12%

Therefore, the interest cost of lending to Bank A is lower.