Refer the above figure.
Here a2-b2 = Area of figure I + Area of figure II = a(a-b) + b(a-b) = (a-b)(a + b)
Thus a2-b2 = (a-b)(a + b).
Here a = 2 units and b = 1 units
So, L.H.S = a2-b2 = 22-12 = 3 units
R.H.S = (a-b)(a + b) = (2-1)(2 + 1) = 3 units
Therefore L.H.S = R.H.S
Hence,the identity is verified.
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