Multi-factor authentication office 365

I have office 2016

Check the value of the following reg key (should be 1, or not present):

HKCU\SOFTWARE\Microsoft\Office\16.0\Common\Identity\EnableADAL

And post a screenshot of the password prompt you are getting.

Your office 365 plan is enterprise plan?

If no, Outlook 2016 on "exchange" authentication DOES NOT support or understand the two factor authentication.

Source: http://answers.microsoft.com/en-us/msoffice/forum/msoffice_outlook/cant-get-outlook-to-use-multi-factor/1a731e97-c68b-4e04-8559-422480add53e?auth=1

Okay I had to create app password them create password for each machine

Do I pay for TXT msg ? if Microsoft is sending me all passwords ?

Also every time I have to do multi factor when I login via browser from same computer, hmm strange ?

Do I pay for TXT msg ?
No

If Microsoft is sending me all passwords ?
It is OTP sms from MS

Also every time I have to do multi factor when I login via browser from same computer, hmm strange ?
It depends. If you download an MS Account app in your smartphone, you will not receive the OTP sms.

https://play.google.com/store/apps/details?id=com.microsoft.msa.authenticator

On logon from web in anywhere, just approve the request within MS accounts app. Of course, your smartphone must be connected to the Internet.

Besides, you can click trust this browser when you connect to your ms account the first time, and you will not be prompted for two factor authenication unless you reset your browser or revoke the trust from your ms portal.