How can we configure Ebgp between two routers and use password for authentication between them? And how we verified this weather it's working or not?

You can configure MD5 authentication between two BGP peers, meaning that each segment sent on the TCP connection between the peers is verified. MD5 authentication must be configured with the same password on both BGP peers; otherwise, the connection between them will not be made. Configuring MD5 authentication causes the Cisco IOS software to generate and check the MD5 digest of every segment sent on the TCP connection.