In this method, one node of the circuit is taken as lowest potential reference at zero volts (called circuit ground); while the voltage of other nodes are assumed to be V1,V2,V3. with respect to the reference node.

The current equations are written by using KCL. Thus, if there is n number of nodes in the network, then current equations for (n-1) nodes are written and then solved.

Consider a network as shown in fig.2.12. Node 3 has been taken as reference node.

Let V1 and V2 be the voltages of the nodes 1 and 2 respectively with respect to reference node. Then applying KCL at node 1, we get:

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