Next, click Install ArcGIS Desktop.
THEN WAIT WHILE THE COMPUTER DETERMINES IF THERE'S ENOUGH AVAILABLE SPACE.
If you have already tried to install ArcGIS plus your extensions and find that your extensions are not showing up, you will click Modify (shown above). If this is your first time with the installation process, click Custom install (not shown).
Now, click on the drop-down arrow next to the extension(s) you wish to install, in the case above 3D Analyst and Spatial Analyst, and you will get a little hard drive icon that says "Will be installed on local hard drive." Click Next and Next and your extension installation should be successful.
You will be prompted at the end of the installation process to add your alpha-numeric license code. The the first time you launch ArcMap, go to Tools -> Extensions and then check on the extensions that you loaded (and have licenses for).