I am trying to calculate possilbe shadow areas of buildings in a city of which I have the building heights, sun angle and azimuth. Is there any software for this kind of simulation work, and if you can explain a little bit for me.

Look up Shadow Analyzer Software and choose the best program for your need.

According to this particular Shadow Analyzer Software option, you can determine the shadow objects cast for use in shadow effect analysis and solar panel installation, taking into account time of day, season, and geographical latitude.

You can also use this particular type of software to see how shadows fall inside buildings. The example above is a standalone application, there are others that are add-ons to CAD software systems.