Yes Energy is conserved when a nail is hammered in a piece of wood..
It involves the Muscular energy of our muscles which help to move the Hammer then the kinetic energy of hammer, after hitting this energy is converted into kinetic energy of nail ,some energy is wasted as sound energy which we heared while hitting the nail and some amount of energy is lost as heat to the environment ....as the nail become hot at the point of hitting..Also Internal energy of nail also increased if the temperature of nail rised a bit..
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