One technique which really helps in cases like this:
In the Finder, if you hold down the Command key on the keyboard and click on the name of a window for an open folder, you will see exactly where that folder is on the hard drive. So if you click on the Applications in the side bar, then Command-click on the title of the window, you'll see where it is.
Also, you can move a folder by clicking on the little picture of the folder in the title bar, and dragging it to where you want it to be. So the easy fix for this problem would be to click on Applications in the sidebar, and when your applications window opens, click on the picture of the folder, hold down the mouse button, and drag to your hard disk.