What is the purpose of caches?
Caching decrease your page load time and speed up your site. It is used especially when you have images, maps, videos and audio on your page. We can use drupal internal cache or integrate other caching tools like APC, Mem Cache, Varnish with our drupal site.

Why we clear cache?
 When we made some new changes in our theme or code, so to test them we clear old cache so that old data will be removed from cache and new data will be loaded to be displayed changes.