When we use simulator and store files in isolated storage. Where is the file actually stored on computer? I mean the path.
If by "simulator" you mean the emulator then this data is not stored in a "real" folder on the host PC.
The emulator is (for arguments sake) a virtual machine and so has it's entire folder structure stored separately.
On the assumption that you don't just want to know this but rather work with the files in Isolated Storage (as part of your development/testing process) then you should check out Windows Phone 7 Isolated Storage Explorer which allows you to interact with these files.
If you want to work from the command line (to automate your interaction) then check out this post by Justin Angel on emulator automation.