What is actually multilevel cache in processors?
how does L1 and L2 cache help processor to speed up the computer performance?
Cache memory is small, fast memory your CPU uses to store frequently accessed data. The benefit is if the CPU finds what it is looking for in the cache, doesn't have to read from main memory (RAM), which is slower. Overall, this increases performance because the time it takes to fetch data is reduced.
L1 and L2 caches: the difference is that L2 is bigger and slower, than L1. The CPU looks for what it needs in the L1 cache first. If it doesn't find the requested data, it goes to L2. If the requested data is not in L2, then it goes to main memory.
A good analogy is having your frequently read books on the nightstand (L1) instead of the shelf (L2). When you want to read a book, you go to your nightstand, which can only hold 5 books. If it is there, you're all set. Sometimes the book you want to read is not on your nightstand -- this is a 'cache miss', and you'll have to go to your shelf, which holds 10 books. If it is not on your shelf, you go to the public library (main memory), which holds 100s of books.
L1 and L2 stand for Level 1 and Level 2, levels of cache memory in a machine. If your processor can find the required data in this cache memory, it won't search the RAM. This is faster and the larger the cache memory, the better the performance(theoretically). Computer performance however depends on a large number of factors that includes the cache memory(to a small extent), but is not limited to it. Considering most modern processors have almost the same amount of cache, main performance is determined mostly by other factors such as clock speed, number of cores, hyper-threading, etc.