My computer is 2 years old, with a AMD athlon II x4 635 quad-core processor, yet I can only hold 5 players without lag.
Thank god I have a server-grade Intel Xeon quad-core 3.1 GHz tower server, or else I couldn't host any servers at all. That processor's usage is 1% for every 50 players, so each core can hold about 750 players without any lag.
Your CPU is probably half as good as my PC's Athlon.