Computer Architecture: How to determine the bits of the address used to access the cache?
A direct-mapped cache is another name for a one-way set associative cache.
Calculating number of bits in address space
 Number of bits in address space = log2(Memory size)
 Bits in (Tag + Index + offset) = Number of bits in address space
In order to know the number of bits in Tag field, we would need to figure out the number of bits in Index and Offset fields. Then the above equation can be used to get the number of bits in the Tag field.
The index bits are used to select the row in the cache. The offset would then be used to get the cache block. This means we definitely need those number of bits to access information from the cache and the remaining bits from the total address space can be used to store the tag information.
Calculating the number of bits for the offset
The offset fields can be calculated using the information about the block size. A cache block is the basic unit of storage for the cache. For these set of problems the offset should be able to index every byte from within the cache block.
offset bits = log2(block size)
Calculating the number of bits for the cache index
Calculation for the number of index bits is slightly more involved than the calculation for the offset field. The reason being that the calculation needs to take the number of sets, block size and the cache size into account. The index bits are needed to select the cache row but before that we need to figure out the number of rows for a given cache configuration.
The number of rows would be equal to the cache size divided by the block size for a direct mapped cache (there's just one way). For a n-way set associative cache, the number of rows would be cache size divided by the number of ways and the block size, i.e.
Number of rows = Cache Size / (Block Size x Number of Ways)
Once the number of rows are known, the number of index bits would simply be the log base 2 of the number of rows:
Index bits = log2(Number of rows)
That's it. We can now work the number of Tag bits using the following relationship:
Tag + Index + Offset = Address bits
Source: https://blog.quicksilicon.in/setassociativecache/