0.05*8 = 0.4 inches = 5% of its original height
As a result, the candle's height decreases by 0.4 inches per hour.
The height will be 7.6 in after 1 hour. It will be 7.2 in about 2 hours. It will be 6.8 after 3 hours, and so forth.
We must determine when the height will be 7 inches. This happens when the candle height has shrunk by one inch (from 8 in to 7 in). As we can see from the estimates above, this will happen between 2 and 3 hours. After 1/0.4 = 2.5 hours, the height will have decreased by 1 inch.