How do I know that I need rotors replacement
 

My 300 SEL 1988

When I am reversing from the driving way there is this knocking sound on the rear right wheel
When taking off (forward) this knocking sound increases when the wheel turn faster. It's loud as if I am using a hammer.
When applying brakes it's like its grinding (metal to metal)
At times this sound is not there at all.

I checked the break pads and they are in good shape.

Could this be the rotors.

I tried following the discussion on the rotors but it's not that clear.

On the outside edge of the rotor, if it is worn there will be a substantial lip. This lip could make contact with the metal base of the pad and grind even if you have good pad material left. If that is the case you probably are overdue for a new rotor.

Tom W

I'm thinking maybe a wheels bearing? Check the lugnuts first and pull the wheel to check the braking components...

-GH

There is a minimum spec for the rotors. Should be stamped right on the rotor. Find out what it is for your car and measure it to see if you are below the minimum.

Agree:
 

Bad wheel bearing.

Support the trailing arm.
Rock the tire top/bottom = any motion = bad bearing.

I'm not sure which rear wheel your emergency brake cable is attached to, but I had the same symptom on my W124 when the e-brake spring near the hub broke, resulting in the loud banging you describe.

One way to test is to drive the car and depress the the e-brake lever slightly to see if anything changes or the noise disappears...