iPhone 5 show iOS old iOS (9.3.5) as available update not the latest iOS (10.0)
The iPhone already downloaded the 9.3.5 update and can't download / install iOS 10 until that is dealt with. Either remove this download from the iPhone, or install the update and later update to iOS 10.

To delete the update:


Go to Settings > General > Usage > Manage Storage.
Tap Delete Update, and tap Delete Update again to confirm.