My iPhone is asking for software update and a password, but there is no update. How much will it cost to reset the software through the Apple Store?

The phone's software may need to be updated. Is there a cost to have Apple reset the software?

Where did you hear that? Genius Bar visits at an Apple store are free, and any software repairs they do are free, unless the phone is jailbroken; then they won't touch it. But they still won't charge you.
I think it more likely the "update" is actually a phishing attack against you. Unless your phone is jailbroken; then your phone and your security is in big trouble.

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