We solve numerically, we believe for the first time, the exact cavity equations of motion for a realistic unstable resonator with a simple gain saturation model. The cavity equations of motion, first formulated by Siegman ["Exact Cavity Equations for Lasers with Large Output Coupling," Appl. Phys. Lett. 36, 412-414 (1980)], and which we term the dynamic coupled modes (DCM) method of solution, solve for the full 3-D time dependent electric field inside the optical cavity by expanding the field in terms of the actual diffractive transverse eigenmodes of the bare (gain free) cavity with time varying coefficients. The spatially varying gain serves to couple the bare cavity transverse modes and to scatter power from mode to mode. We show that the DCM method numerically converges with respect to the number of eigenmodes in the basis set. The intracavity intensity in the numerical example shown reaches a steady state, and this steady state distribution is compared with that computed from the traditional Fox and Li approach using a fast Fourier transform propagation algorithm. The output wavefronts from both methods are quite similar, and the computed output powers agree to within 10%. The usefulness and advantages of using this method for predicting the output of a laser, especially pulsed lasers used for coherent detection, are discussed.