Installing floating structures in a coastal area requires careful observation of the finite-depth effect. In this paper, a Rankine panel method that includes the finite-depth effect is developed in the time domain. The bottom boundary condition is satisfied by directly distributing Rankine panels on the bottom surface. A stepwise analysis is performed for the radiation diffraction problems and consequently freely-floating motion responses over different water depths. The hydrodynamic properties of two test hulls, a Series 60 and a floating barge, are compared to the results from another computation program for validation purposes. The results for both hulls change remarkably as the water depth becomes shallower. The important features of the results are addressed and the effects of a finite depth are discussed.