Found this on Wikipedia
http://es.wikipedia.org/wiki/Tasa_anual_equivalente
unfortunately in Spanish but translates as follows
The Equivalent Annual Rate (TAE) is an orientative reference of the real cost of an investment or loan. The exact meaning is Equivalent Annual Rate or Effective Annual Rate. The TAE is an indicator that, in the form of annual percentage, reveals the cost or effective yield of a financial product, since it includes the type of nominal interest, the expenses and banking commissions and the term of the operation. That is, that the TAE difference of the type of interest in which this one picks up neither the expenses nor the commissions; only the compensation that receives the proprietor of the money to yield it temporarily. The calculation of the TAE is based on the type of compound interest and the hypothesis that the obtained interests become to invest to the same type of interest. That is the general rule. But the calculation of the TAE can slightly be different according to in question banking product. Term TAE as much appears in products saving as in the loans, as much hypothecating as consumption. Habitually, the TAE does not include the expenses that the client can avoid (for example, the expenses of transference of bottoms), those that pay to third people or companies (notarial brokerages, honoraria and taxes) or the expenses by insurances or guarantees (except for premiums destined to guarantee to the organization the reimbursement of the credit in case of death, dissability or unemployment, whenever the organization imposes its subscription for the concession of the credit). One calculates like the result of a standard mathematical formula that considers the type of interest, banking commissions, frequency of the payments (monthly, quarterly, etc.) and other expenses or income. It is very important to know if the type that is offered in an operation is the TAE (it could be a type of monthly, semester, quarterly interest). In order to calculate the TAE from the TIN this formula is used: TAE= (1+ \ frac {r} {f}) ^f-1 \ Where: * r, is the type of nominal interest (monthly, semester…) expressed in relative terms (p.ej: 7%=0,07 in as much by one). * f, frequency of payments/collections of interests: he is 12 if the type is monthly, 6 if he is bimonthly, 4 if he is quarterly, 3 if he is four-month, 2 if he is semester, and 1 if he is annual. It is important to know this data, because when P. ex. a bank promises a 7% TAE during the first month, does not mean that 7% occur to that month than is entered.
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Well I'm confused!!