If God knew that Satan would rebel and Adam and Eve would sin, why did He create them?

This is a two-part question. The first part is “Did God know Satan would rebel and Adam and Eve would sin?” The answer lies in what the Bible teaches about God’s knowledge. We know from Scripture that God is omniscient, which literally means “all-knowing.” Job 37:16; Psalm 139:2-4; Psalm 147:5; Proverbs 5:21; Isaiah 46:9-10; and 1 John 3:19-20 leave no doubt that God’s knowledge is infinite and that He knows everything that has happened in the past, is happening now, and will happen in the future.

Looking at some of the superlatives in these verses—“perfect in knowledge”; “his understanding has no limit”; “he knows everything”—it is clear that God’s knowledge isn’t merely greater than our own, but it is infinitely greater. He knows all things in totality. Not only that, but Isaiah 46:10 declares He not only knows everything, but He controls everything as well. How else could He “make known” to us what would happen in the future and state unequivocally that His plans will come to pass? So did God know that Adam and Eve were going to sin? Did He know Lucifer would rebel against Him and become Satan? Yes! Absolutely! Were they out of His control at any time? Absolutely not. If God’s knowledge is not perfect, then there is a deficiency in His nature. Any deficiency in God’s nature means He cannot be God, for God’s very essence requires the perfection of all His attributes. Therefore, the answer to the first question must, by necessity, be “yes.”
Moving on to the second part of the question, “Why did God create Satan and Adam and Eve knowing ahead of time they were going to sin?” This question is a little trickier because we are asking a ‘why’ question, to which the Bible doesn’t usually provide comprehensive answers. Despite that, we should be able to come to a limited understanding if we examine some biblical passages. To begin, we have already seen that God is omniscient and nothing can happen outside of His knowledge. So if God knew that Satan would rebel and fall from heaven and Adam and Eve would sin, yet He created them anyway, it must mean that the fall of mankind was part of God’s sovereign plan from the beginning. No other answer makes sense given what we have been saying thus far.
Now we must be careful to note that Adam and Eve falling into sin does not mean that God is the author of sin, nor that he tempted Adam and Eve to sin (James 1:13). The fall serves the purpose of God’s overall plan for creation and mankind. This, again, must be the case or else the fall of mankind would never have happened.
If we consider what some theologians call the "meta-narrative" (or over-arching story-line) of Scripture, we see that biblical history can be roughly divided into three main sections: 1) paradise (Genesis 1-2); 2) paradise lost (Genesis 3 - Revelation 20); 3) paradise regained (Revelation 21-22). By far the largest part of the narrative is devoted to moving from paradise lost to paradise regained. At the center of this meta-narrative is the cross. The cross was planned from the very beginning (Acts 2:23). It was foreknown and foreordained that Christ would go to the cross and give His life as a ransom for many (Matthew 20:28)—those chosen by God’s foreknowledge and predestined to be His people (Ephesians 1:4-5).
Reading Scripture very carefully and taking what has been said so far, we are led to the following conclusions:
1. The rebellion of Satan and the fall of mankind were foreknown and foreordained by God.
2. Those who would become the people of God, the elect, were foreknown and foreordained by God.
3. The crucifixion of Christ, as atonement for God’s people, was foreknown and foreordained by God.
So we are left with the following questions: Why create mankind with the knowledge of the fall? Why create mankind knowing that only some would be "saved?" Why send Jesus knowingly to die for a people that knowingly fell into sin? From man’s perspective, it doesn’t make sense. If the meta-narrative moves from paradise to paradise lost to paradise regained, why not just go straight to paradise regained and avoid the whole paradise lost interlude?
The only conclusion we can come to in view of the above assertions is that God’s purpose was to create a world in which His glory could be manifest in all its fullness. The glory of God is the overarching goal of creation. In fact, it is the overarching goal of everything He does. The universe was created to display God’s glory (Psalm 19:1), and the wrath of God is revealed against those who fail to glorify God (Romans 1:23). Our sin causes us to fall short of God’s glory (Romans 3:23), and in the new heaven and new earth, the glory of God is what will provide light (Revelation 21:23). The glory of God is manifest when His attributes are on perfect display, and the story of redemption is part of that.
The best place to see this in Scripture is Romans 9:19-24. Wrath and mercy display the riches of God’s glory, and you can’t get either without the fall of mankind. Therefore, all of these actions—fall, election, redemption, atonement—serve the purpose of glorifying God. When man fell into sin, God’s mercy was immediately displayed in not killing him on the spot. God’s patience and forbearance were also on display as mankind fell deeper into sin prior to the flood. God’s justice and wrath were on display as He executed judgment during the flood, and God’s mercy and grace were demonstrated as He saved Noah and his family. God’s wrath and justice will be revealed in the future when He deals with Satan once and for all (Revelation 20:7-10).
The ultimate exhibition of God’s glory was at the cross where His wrath, justice, and mercy met. The righteous judgment of all sin was executed at the cross, and God’s grace was on display in pouring His wrath for sin on His Son, Jesus, instead of on us. God’s love and grace are on display in those whom He has saved (John 3:16; Ephesians 2:8-9). In the end, God will be glorified as His chosen people worship Him for all eternity with the angels, and the wicked will also glorify God as His justice and righteousness will finally be vindicated by the eternal punishment of all unrepentant sinners (Philippians 2:11). None of this could have come to pass without the rebellion of Satan and the fall of Adam and Eve.
The classic objection to this position is that God’s foreknowledge and foreordination of the fall does damage to man’s freedom. In other words, if God created mankind with full knowledge of the impending fall into sin, how can man be responsible for his sin? The best answer to this question can be found in the Westminster Confession of Faith chapter III:
“God, from all eternity, did, by the most wise and holy counsel of his own will, freely, and unchangeably ordain whatsoever comes to pass; yet so, as thereby neither is God the author of sin, nor is violence offered to the will of the creatures; nor is the liberty or contingency of second causes taken away, but rather established” (WFC, III.1)
What this is saying is that God ordains future events in such a way that our freedom and the working of secondary causes (e.g., laws of nature) are preserved. Theologians call this “concurrence.” God’s sovereign will flows concurrently with our free choices in such a way that our free choices always result in the carrying out of God’s will (by 'free choices' we mean that our choices are not coerced by outside influences).
Wrapping this up, God knew that Satan would rebel and Adam and Eve would sin in the Garden of Eden. With that knowledge, God still created Lucifer and Adam and Eve because creating them and ordaining the fall was part of His sovereign plan to manifest His glory in all its fullness. Even though the fall was foreknown and foreordained, our freedom in making choices is not violated because our free choices are the means by which God’s will is carried out.