cPanel .htaccess URL Rewrite help !

i need to change my URL using .htaccess file. my original URL is

http://www.mydomain.com/subfolder/index.php?var=new

i need to change it like this,

http://www.mydomain.com/subfolder/new

can you help me to do this using my .htaccess file in cPanel and what is the exact location to locate my .htaccess file.