Can't Install Applications - Please Help

I have an iMac that has been working fine, and then out of the blue, I tried to install something and it won't let me install it.
The installed pops up an icon that asks me to drag the icon to the Applications icon and when I do that, I get this error message:
"The alias "Applications" can't be opened because the original item can't be found"
How can I fix this?
In the Finder, under Places, there is something that says Applications and it lists all of my apps however, if I click on my actual login name, and go the the Applications folder there, it is blank.
Thanks in advance.

You are not going to see a applications folder under you user folder. Applications live in other Devices.
I think you maybe installing this particular app. wrong. How about delete it and any alias. Do a fresh download of the app. and open the package. Drag the app to the appl folder on the sidebar of the finder and see if this works.

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