Find out the correct sentence

The correct sentence is:

✅ Knowing little algebra, I found it difficult to solve the problem.

Explanation:

The introductory phrase “Knowing little algebra” must logically refer to the person who knows little algebra.
Only the second sentence clearly shows who knows little algebra (“I”).

Why the others are incorrect:

❌ Knowing little algebra, the problem was difficult to solve.
→ The problem cannot “know” algebra (dangling modifier).

❌ Knowing little algebra. solving the problem was difficult.
→ Grammatically incorrect and unclear.

❌ Knowing little algebra, it was difficult to solve the problem.
→ “It” is vague and does not clearly refer to a person.

✔ Therefore, the correct answer is option 2.