SharePoint error-The password supplied with the username was not correct. "Error while creating web application"

Some days back I was creating a SharePoint web application in my local machine. 
I entered all the details of the web application and when I hit the Create button, i got the following error.

"The password supplied with the username <domain\username> was not correct. Verify that it was entered correctly and try again"

This error occurs when we change the password in application pool of IIS and the password will not be updated into the power shell. 

To change the password in power shell we need to run the stsadm tool.

Step1: 
Navigate to the directory "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\14\BIN" and run the following command. 

Step2:

"stsadm -o updatefarmcredentials -userlogin domain\username 
-password  password".

After running this command a message will be displayed as "Operation completed successfully."

Step3:
After you got this message, do a IIS reset and proceed with the creation of web application. The web application will be created successfully.