By default, the "Power Spectral Density" (PSD) block is set to have a sample time of Ts = 0.1 seconds. You should open the PSD block and lower the sampling time (Ts = 0.05 seconds or less should be sufficient at this frequency). Upon running your Simulink code again, you should see the peak where you originally anticipated it to be!
The sinusoidal input that you are providing to the PSD block has a frequency of 35 rad/s or approximately 5.6 Hz. The default sample time of Ts = 0.1 seconds equates to a sampling rate of 10 Hz. To prevent aliasing (where a signal losses information), you should always ensure that sampling rates are double the signal frequencies. This condition is known as the Nyquist rate .
Hope this helps!
