how do passwords work?

newbie here. so consider this paradox: let's say you have a pass protected rar file. now the password should be stored somewhere in the file to compare against the inputted password. so if it's there how come you cant just extract it?

>>38
The only way to compress PRNG output that comes to my mind is to discover the seed used to generate the bytes - but it's not a compression then, it's a hack.

Please, explain to me, what's the difference between PRNG output and true random data? How can one tell apart them, if he does not know the algorithm used to produce it?