How is it possible to define a variable type as an interface :
List<BigDecimal> filter = new ArrayList<BigDecimal>();
Shouldn't we define a variable by class or primitive data types and not an interface as follows :
ArrayList<BigDecimal> filter = new ArrayList<BigDecimal>();
How is it accepting interface variable definition?
In general, it's preferred to code to interfaces (your first example, declare the variable using the interface, not the class). That way, if you need to change to a different implementation, it's trivial to do that — you just change the new to something else, and nothing else needs to change, because you code to the interface.
The reason it works is that ArrayList<BigDecimal> implements List<BigDecimal>, and so is assignment-compatible with it. That means that a variable declared as List<BigDecimal> is allowed to haev a reference of type ArrayList<BigDecimal> assigned to it. It's a design feature of the language. This is fundamental to how interfaces, and indeed OOP in general, works in Java.
