Please move the AirPort Extreme further away from the Time Capsule......at least 6 feet or more for the setup.
Power up the AirPort Extreme and let it run a few minutes
Hold in the reset button on the back of the AirPort Extreme for 10 seconds and release
Allow a full minute for the Extreme to restart to a slow, blinking amber light
Temporarily, connect an Ethernet cable from your Mac to one of the three LAN <-> ports on the back of the Extreme
Open AirPort Utility and click on the Other WiFi Devices button in the upper left corner of the window
Click on AirPort Extreme
AirPort Setup will take a minute to analyze the network, then suggest that the Extreme be configured to extend the Time Capsule network
Enter a device name that you want to use for the Extreme
Click Next
Wait while AirPort Setup configures things for you
When you see the message of Setup Complete, click Done
Now disconnect the Ethernet cable that you used before and store it for safekeeping
Unplug the Extreme and move it to a location that is about half way between the Time Capsule and the general area that needs more wireless signal coverage and power up the Extreme
You should be all set