An environmentally-friendly home (99% air tight) costs about 7% more to construct than a conventional home. Most environmentally-friendly homes can save over 20% per year on energy expenses to heat and cool the house. If a conventional house costs $240,000, with expected annual heating and cooling costs of $2,500/year increasing at 3% per year, what percentage reduction in the heating and cooling expenses would have to occur per year if the house life is 30 years and the cost of money is 5% per year? (Assume the additional cost of the environmentally-friendly home has no value at the end of 30 years.)