Why evil exists?

Allah does not create pure evil which does not have any good or contain any benefit, wisdom or mercy at all, nor does He punish anyone without having committed a sin. Something can be good in terms of its creation when viewed in a particular perspective and at the same time be evil when viewed in another way. Allah created the devil and by him He tests His servants, so there are those who hate the devil and fight in His way and they stand at enmity towards Satan and his followers and there are others who are at allegiance with the devil and follow his steps. So evil exists in His creatures by His will and wisdom, not in His actions or act of creating.

Source: Book-> Fortification for Muslims