Like most of South America, the official language of Peru is Spanish.
English might be understood by youth in Lima and to an (even) lesser extent in tourist centers like Machu Picchu. Outside of that, you'll need Spanish. Like every other Latin American country, Peruvian Spanish replaces vosotros (and its 2nd-person plural conjugations) with ustedes (3rd-person plural). For example: ¿Cómo están? instead of ¿Cómo estáis?. South American Spanish likes diminutives (gringuito is more affectionate than gringo).
If you learn languages easily, try to learn Quechua, the language of the Incas. It will be highly appreciated in the countryside of the Sierra, where many indigenous speak it as a first language, though most also speak Spanish. On the Altiplano, the unofficial language Aymara is widely spoken. Aymara was the language of the Tihuanacu culture.
Peruvian Spanish, particularly in the Sierra and jungle, is pronounced much less clearly than European Spanish and Spanish from other Latin American countries, especially Mexico, Colombia and Chile. People don't tend to speak too fast, although in coastal areas, especially Lima, people speak considerably faster than in other areas, and they also use slang quite liberally. On the whole, Peru is a good and cheap place to embark on Spanish courses (once you are there).
Some slang terms come from Quechua:
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