Hi I'm Peruvian...
Now, the cost of living here is really cheap if you compare it with cities
(like New York, London, Tokyo).
On $500/month most families can get by, Of course there are social and infrastructural differences that require getting used to.
About what the other person said on prices - she is speaking in our currency,
not in dollars (1 dollar = 2.8 New Soles). A gallon of gas is S10, (Soles, not Dollars)
the rent of a nice enough apartment in a pretty place (2 bedrooms/2 bathrooms/ kitchen/laundry/living room) can go between $150 to $350.
There are public universities where you pay only $25 per semester, and private universities where you can pay as much as $700 per month. Really,
it isn't that expensive here. Well, if you wanna buy things made in the US, they are going to be more expensive than things from China, what's new (a can of coke = $0.60),
but local things are pretty cheap (a kg of potatoes = $0.30, a kg of sugar = $0.30,
a gallon on 90 gasoline = $ 3.5). Most tourists here have the time of their lives with so little money
(even though some Peruvians tend to charge more money to them).