This information is generously provided by
South American Explorers Lima Club

WHERE TO GO:
Visa extensions can be done in Lima, Cusco, Puno, Puerto Maldonado and Iquitos. Hours of attention are 9 am to 1:30 pm Monday thru Friday. Lines are usually shorter in the early morning, and it should not take you more than 2 hours to extend your visa.

COST:
Tourists are allowed three months extensions of their visas. After this time, you must leave the country to get an extension. This simply entails crossing the border and returning again (ask for the full 90 when you return).
One-month visa extensions cost $20 (USD) per month, plus 25 soles for processing fees. Extensions of the tourist visa can be purchased for up to three months. Extensions can be purchased on a monthly basis, or can be purchased all at once on your visit to the immigration office.

WHAT TO DO:
Go to the immigration office (addresses below) and show your passport to enter the building. Pick up the Visa Extension form at the information desk on the first floor (these can also be downloaded from the Peruvian Migration and Naturalization Website www.digemin.gob.pe, "Visa Temporal, Visa Residente")
In Lima, visa extensions are handled on the third floor. Go to the window that says "Prorrogas Residencia" and present your passport and tourist visa card. The official will give you a receipt for $20. At this time, you will need to go down to the first floor, make a copy of your visa and passport. You can then pay for the extension at the Banco de la Nacion, located down the corridor from the copy machine. There may be long lines for the bank. Fill out the form and return to the same teller on the third floor. Give the official your stamped receipt and your filled out form. After this you will be asked to wait for your passport and extended visa, which shouldn't take longer than 20 minutes.

EXPIRED VISAS:
Expired visas are subject to a $20 fine upon departure or extension. Whether your visa is one day over due or 30 days over due, you will pay $20 all the same. It will cost another $20 to renew your expired visa, and you will only be given one month from THE DAY THAT YOUR VISA EXPIRED, not from the day you pay the fine. When crossing borders on expired visas, be wary of officials over charging you (it should only be $20), but be aware that if you are planning on re-entering on the same border, you will be dealing with the same officials. In other words, the nicer you are the more likely they are to give you the maximum number of days upon re-entry.